The following is an extract from The Budget Paper 2 Part 2 Expense Measures Defence.
From 1 July 2016, the Government will establish a modern fully funded, accumulation superannuation scheme for new members of the Australian Defence Force (ADF). The existing Military Superannuation and Benefits Scheme (MSBS) will be closed to new members from this date.
The introduction of new fully funded arrangements will reduce the Government’s unfunded superannuation liability by an estimated $126 billion by 2050.
Existing MSBS members who leave and then rejoin the ADF are able to rejoin their existing MSBS arrangements.
There will be no change to the superannuation arrangements for existing MSBS members, but they may elect to be covered by the new arrangements.
Under the new arrangements, the Government will pay a 15.4 per cent contribution to a member’s chosen superannuation fund. The contribution rate will increase to 18 per cent for any period in which members are serving in war‑like operations.
Serving ADF personnel covered by the new arrangements will also be covered by statutory death and disability arrangements consistent with the defined benefit arrangement currently in place under the MSBS.
The new arrangements will be more flexible than the MSBS, as members will be able to transfer superannuation benefits to a fund of their choice.
ADSO will be meeting with the relevant Minister to discuss the details of this decision.