Military Superannuation

ADSO and the wider ex-service community has long sought redress of the many recognised contested issues associated with the various Military Superannuation schemes as detailed below.

None of these issues found redress in the 2019 Federal Budget. However, the Government’s recent announcement that it would commission an independent inquiry into the administration of Defence Force Retirement and Death Benefits (DFRDB) scheme commutation arrangements was welcome news. In that announcement DVA Minister Daren Chester said,

“The Government recognises the importance of open and transparent discussion around veteran concerns and we will consult with the ex-service community about the terms of reference for the inquiry, as well as panel membership”.“Ex-Service Organisations and scheme members will have the
opportunity to make submissions to the inquiry and raise any other concerns relevant to the scheme”.

ADSO will accept the Minister’s consultation re its Terms of Reference and panel membership: for the former it will advocate to examine the DFRDB Act and past and present Government decisions and policies, many of which have resulted in unjust and clearly unfair outcomes for many military superannuants. ADSO will make a submission to the inquiry.

Fair Indexation for ALL Military Superannuation Payments

Objective: To have all components of military superannuation payments under DFRDB, DFRB and MSBS, including preserved funds and the total reversionary pension for partners of deceased military superannuation pensioners, indexed as provided for under the Defence Force Retirement Benefits Fair Indexation Act.
Explanation: This ensures the purchasing power of their superannuation payments is maintained which was the intent of the original enabling legislation. CPI is a measure of inflation, not purchasing power. They are not the same and as a result all payments indexed to CPI alone lose their
purchasing power over time.

MSBS – Access to Employer Benefits

Objective: To have all MSBS members under preservation age and no longer serving but with “preserved benefits” given the same opportunity provided to all Australians – i.e., the ability to access employer superannuation contributions and to roll over their full benefit into a compliant
superannuation fund of their choice.
Explanation: MSBS preserved benefits’ (employer contributions are a ‘notional amount) are indexed to CPI and cannot be accessed until the preservation age (earliest age 55). Given that CPI is about half the average long term return of Australian superannuation funds this objective will have a significant benefit on a member’s superannuation amount, over time, to the tune of hundreds of
thousands of dollars.

MSBS – Maximum Benefit Limits

Objective: To remove the MSBS Maximum Benefit Limits.
Explanation: Long term members of the ADF can reach a maximum limit when neither they nor the ADF can contribute to their superannuation.

Fair Indexation for All DFRDB Recipients

Objective: To extend the provisions of the Defence Force Retirements Benefits Fair Indexation Act to include all DFRDB superannuants under 55, especially to those in receipt of DFRDB invalidity
superannuation pensions.

DFRDB Commutation

Objective: To immediately apply the up-to-date life tables for calculating commutation and fortnightly payments for current and new DFRDB superannuants; and the rectification of the financial injustices caused by the application of out-dated life tables to superannuants.

Reversionary Benefits (for widows, widowers and dependent children)

Objective: To redress the reduction of all their benefits, i.e. retirement pay, invalidity pay and reversionary pensions for widows, widowers and dependent children, resulting from the manner in which those benefits were indexed before 1 July 2014, and continue to be indexed for those aged under 55.