Volume 11, No. 57, November 30, 2006
Quicklinks to Letters
Where’s the benefit?
Parents need more support
Fix up repair delays
Paying out on the Reserves
HOW
TO GET A LETTER PUBLISHED
Where’s the benefit?
ONE way (and by no means the only way) to keep retention in the Army is by bringing back DFRDB.
I, and every one I have asked, would like to see DFRDB back. Let’s face it: what reason has anyone got for staying in the Army now under MSBS?
As I understand it, after 15 years, and if you’re a sergeant, you sign up for another five years and get one year’s salary (taxed) on top of your pay in return. Or for DFRDB, serve 20 years and receive almost half your pay every fortnight, and more if you served longer than 20 years.
I’ve been in for more than 10 years, corps transferred and now a sapper. To qualify for the MSBS scheme I need to reach sergeant in five years if I want to stay in for 20 years. Will DFRDB ever return, is the above information correct, and what is the reason for myself and every one else in the ADF to stay in under MSBS?
Spr Andrew Needham
1 Topo Svy Sqn
Brisbane
Heather Gill, Assistant Director Superannuation - Policy, responds:
THE short answer to the first question is that DFRDB will not be re-opened.
It was closed for good reasons, including that it no longer provided the right incentives for career ADF members. This is supported by the 2004 ADF Exit Survey, which shows that dissatisfaction with MSBS is low on the list of reasons for leaving. The 2001 Nunn Review also gave MSBS the thumbs-up.
What follows is some general information on DFRDB and MSBS. It does not take into account your personal investment objectives, financial situation or needs.
A DFRDB member who retires at 20 years gets a pension equal to 35 per cent of final superannuation salary. To get a half-pay pension, a DFRDB member has to serve for about 30 years. All DFRDB pensions are taxed as income.
A DFRDB member who leaves before 20 years will get no retirement benefit (unless they serve 15+ years and reach retirement age for rank). They get a refund of their member contribution and a productivity benefit.
There are plenty of incentives to serve longer under MSBS. The MSBS Retention Benefit is only one of them. Also, every year you serve as an MSBS member adds to the employer benefit which you can access as a pension from age 55. This benefit is based on your average salary for your final three years (called final average salary, or FAS). Your FAS is calculated when you leave the ADF.
For your first seven years of service your employer benefit goes up by 18 per cent of FAS a year. From eight to 20 years it goes up by 23 per cent of FAS a year. For each year after 20, it goes up by 28 per cent of FAS a year. For example, if you serve 20 years your employer benefit is:
- FAS times 18 per cent for each of your first seven years = 1.26 times your FAS, plus
- FAS times 23 per cent for each of the next 13 years = 2.99 times your FAS
- This is a total of 4.25 times your FAS. If your FAS was, for example, $50,000, your total benefit would be 4.25 x $50 000 = $212 500.
- If you serve 25 years, your employer benefit goes up to 5.65 times your FAS.
While the notional employer benefit is preserved within the MSBS after you leave the ADF, its value increases by CPI every year. If you choose to take it as a pension at age 55, your annual pension – increased by CPI twice a year – is the total benefit divided by 12. Like the DFRDB pension, this one lasts your lifetime and is taxed as income.
MSBS members’ own contributions are invested in the MSB Fund and members can leave them in the Fund or roll them over to another eligible superannuation fund on discharge. To learn about your MSBS benefits, visit http://www.militarysuper.gov.au/. To learn about your DFRDB benefits, visit http://www.dfrdb.gov.au/
Cmdr Jo Bastian, Assistant Director Pay, Leave and Travel, responds:
THE MSBS Retention Benefit provides a payment to eligible MSBS members who have completed 15 years of continuous eligible service and who are willing to complete another five years of service.
The benefit is available to members who are ranked at least major for officers, or sergeant for ORs.
Officers who were OR members immediately before being commissioned are also eligible.
Members may also be eligible if they have not reached the relevant rank at the 15-year point, but are in an employment category declared by the Minister to be a “specified category” or an “inter-employment category”. These are categories where promotion prospects have been limited for certain Service-related reasons.
Some members who are temporarily medically unfit, or are within five years of compulsory retirement age may still be able to get some or all of the benefit. Members promoted to an eligible rank between 15 and 20 years’ service may be able to receive part of the benefit.
Eligible members who apply for the benefit and commit to the five-year undertaking for further service will receive a payment equal to one year’s salary plus Service allowance. The payment is taxed as salary although members can choose to salary sacrifice the payment into an approved superannuation fund.
Members must apply for the benefit during a specific period, which starts 90 days before their 15th military anniversary and ends on the day of the anniversary. If members are promoted to an eligible rank between 15 and 20 years’ service, they must apply for the benefit no more than 90 days after they are promoted.
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Parents need more support
- IN response to the recently released Defence family initiative, once again the non-custodial parents have been blatantly neglected.
What does it take to get my own children recognised as family? Is it not enough the fact that it costs me in excess of 13,000 tax-free dollars a year to maintain them?
We seem to bend over backwards to keep other certain minority groups happy in this supposedly equity-based Defence Force. I believe that fathers (I’m sure that some are mothers too) are the backbone of this Army and at the moment they are getting a raw deal.
We are told when it comes to being posted away from our family, either accept the posting or take discharge. If we accept the posting to the other side of the country there is no compensation, no assistance, no care to help maintain contact with my family.
Oh, I can approach the CSA to get a reduction in child support. What does that involve? Well for starters I need to spend more than 5 per cent of my child support income to maintain contact. On my salary that equates to more than $3000 a year, which I have to spend before I can claim.
So how do I manage that when I’m already forking out nearly $500 a fortnight? Catch 22 situation, isn’t it? So is the ADF really serious about family stability? Doubt it.
WO2 Scott Towner
5 Avn Regt
Oakey
Kay Austin, Director Service Conditions, responds:
NOTWITHSTANDING the travel entitlements you have as a MWOD or the possibility of a compassionate posting, there is little by way of assistance in current ADF policy to help you maintain contact with your children when you are posted away from the locality that they live in.
Current policy goes some way towards assisting non-custodial parents in that it is possible to be categorised as a Member With Dependants, with the housing entitlements that this entails, if the child is provided with overnight care at your home at your posting location for at least 90 nights a year, or if CDF recognises that the child is expected to live with you at your posting location on a frequent and regular basis. I acknowledge that this is not generally achievable where there are significant distances involved.
The issue of entitlements for non-custodial parents has been raised by members on a number of occasions recently. While there are some common issues between non-custodial parents and the recently completed work on MWD(U) policy, it is intended to review the entitlements of non-custodial parents separately with work commencing later this year. We will provide more information once the review gets under way.
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Fix up repair delays
- I AM currently posted to Darwin Sqn Norforce and would like to ask the policy makers a question.
We had a Land Rover 110 FFR that was called into the workshops in January for suspension bushes and other minor work, but the vehicle did not come back to the unit until August.
The vehicle went out to trade repair for some minor servicing and some minor replacement parts. Now that a lot of the military vehicles are contracted out to civilians for repair, why does it take so long to order parts and get the vehicle repaired?
Since Norforce is classed as an operational unit, the FFR is a major asset for SHQ for deployment for command and control of the patrols. I believe seven months is too long for a vehicle to be repaired, regardless of the type of vehicle.
There’s nothing wrong with the Norforce workshops: the boys there are doing a great job with very limited people and resources.
Just out of interest, I contacted Land Rover Australia and I could get the parts sent to Darwin within 10 days.
So please, can we have an answer as why it takes so long to get vehicles fixed in Darwin?
Cpl Robert Staley
Darwin Sqn
Norforce
Lt-Col Nick Stanton, DGPPA, responds:
THERE is no policy that discriminates against Darwin or any other region for that matter.
All strategic sustainment priorities are assigned on the basis of unit readiness notice. Norforce is classed as a high-readiness unit, along with 1Bde, and places its demands for supply and maintenance support on JLU(N). These demands are assigned priorities by the owner unit, which are then executed by JLU(N).
On the subject of Land Rover parts, stock replenishment and VOR demands are raised at the unit on SDSS for action by the supporting supply organisation. If stock is not on hand within Defence inventory, then JLU raises a local purchase order on SDSS and faxes it to Land Rover at Tullamarine in Melbourne (just as you suggest).
The Defence arrangement with Land Rover is that, if available, the item(s) would normally be picked, packed and dispatched to the JLU by no later than the next working day. JLU would receipt the item(s) and then issue to the demanding unit.
If Land Rover does not have stock on hand and cannot procure it within 21 days, the item will appear on a back order report, which is sent to JLU each month.
The maintenance and supply priorities assigned by your unit play a significant part in the processing and delivery of the demand. In this particular case, the relatively low maintenance priority assigned to the vehicle may have created this perception of a regional policy-imposed delay.
Your ASM is your unit’s expert on materiel maintenance and is best placed to give you a detailed run down on the status of any outstanding job, including provision of repair parts, should you ask.
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Paying out on the Reserves
I WAS not impressed with the article “Financial win for Reserves” (Army, September 21). Maybe they deserve the Service allowance but for them to still want superannuation is a joke.
Reservists get their money tax-free so why not have the Reserves put the same amount of money that should be taxed into their civilian fund as an own contribution?
If reservists receive superannuation then full-time members should have their wages tax-free.
If the Army is so concerned about retention it should be looking after the members who are full-time and are placing their career efforts towards Defence. They should not be so concerned with the part-time members, who for some it is a hobby on Tuesday night or the occasional weekend away wasting resources and money from the Defence budget.
There is also this new High Readiness Reserve, which is a great idea but why not offer a $10,000 tax-free bonus to full-time members at the end of their four-year initial enlistment or for them to sign for another year full-time?
Gnr Cory Camps
131 STA Bty
Gallipoli Barracks
IN basic terms what nearly everyone who writes in about the proposed pay rises is trying to put across is that it is inadequate.
A rise of 4.2 per cent a year for three years barely keeps up with your figures, let alone the Reserve Bank’s inflation figures. If the community sees that the ADF is a well-paid professional organisation then some of the Service Chiefs’ recruiting worries will be relegated to the waste bin.
Earlier this year the Army Reserve won a 17 per cent pay rise with effect from September 1. Is the ARA doing less than the Reserve and what productivity and efficiency improvements were the Reserve pay increase linked to?
According to Army (September 21), it took two days for the pay rise to be approved. Does the proposed WRT also apply to reservists? If so that gives reservists a pay rise of 30 per cent over four years. How can that be in any way fair to the rest of the ADF?
Sgt James Crvelin
Campbell Barracks
Maj George Georgiadis, SO to DGRes-A, responds:
IT is quite surprising that the old ARA v ARes rivalry is as strong as ever.
What authors of these letters have failed to realise is that the ARes is a vital part of the Army and provides valuable capability supporting the ARA in the conduct of operations. There has been much ado about nothing by some members of the ARA about the recent announcement surrounding the DFRT determination concerning ARes remuneration. In order to demystify the recent announcements, I will outline each initiative:
1. The $10,000 completion bonus is paid to compensate an ARes member who has committed to disrupting his or her life for two years in order to maintain a higher readiness notice. It must be remembered that most reservists have a full-time civilian career and are now being asked to be ready to leave their jobs and deploy on operations within the same readiness notice as their supported ARA unit, and then to return at the end of their deployment and pick up where they left off.
2. Regarding the $2500 annual medical allowance, it has been decided that since HRR members are required to maintain the same level of medical and dental standards as their ARA counterparts, and since JHSA is unable to provide HRR personnel the required health support, the health allowance will ensure HRR members are ready to deploy at short notice.
3. There is no superannuation option being considered for the ARes.
4. The so-called 17.6 per cent “pay increase” is not a pay increase per se, rather it corrects a long-standing determination where reservist have generally been paid 10-15 per cent less than the equivalent ARA daily rate of pay. It should be noted that, to be paid the extra money, a member of the ARes must have the complete suite of ARA competencies for both rank and trade. The purpose and intent of this determination was to ensure that when ARA members transferred to the ARes, they were not disadvantaged by being paid a lesser percentage for competencies they were paid when full-time.
5. The $10 a day Reserve Allowance has been put in place for the same reasons that the ARA is paid Service Allowance, i.e. to compensate for the special demands and exigencies of service in the Reserve as they are not fully compensated by the payment of on-occurrence allowances.
Both the ARA and the ARes are parts of the Australian Army and are making a positive contribution to the service of our country. Some of us choose to do so full-time and join the ARA; others choose to do so part-time, yet we all serve together. All members of the Army, both ARA and ARes, must understand that there are inherent differences in the conditions of service for each component of the Army.
AS an ARA member attached to a ARes battalion I have listened to the comments from ARes soldiers and officers and read with interest comments in your newspaper about ARes pay and conditions.
I cannot fathom ARes thinking and abhor the effort that is being invested into the ARes and not on those people that matter most – the ARA soldier.
Take two soldiers of Pte (P) rank on Group 1 pay scale – Pte 1 being ARA and Pte 2 ARes HRR – place them side by side on exercise, in receipt of Tier 1 field pay and look at the difference. Pte 1 receives a daily pay rate of $101, including field pay and Service Allowance, minus tax and super. Pte 2 receives a daily rate of $366, including field pay, Reserve Allowance, $10,000 bonus and $5000 medical allowances with no deductions. Can you see the difference? (Figures are approximate based on pay scales valid until March 2006 and based on HRR minimum service over a two-year period).
In terms of experience, dedication and willingness to serve, I can see no similarity between the ARA and ARes and have been deeply disturbed by the “club” mentality and general lack of the “basic skills” across the ARes – and still they complain, generally at the senior level, about the absence of superannuation and pay levels.
Is it not time to make the ARes accountable for the billion-dollar budget or is it time for all ARA soldiers to get a pay rise by joining the HRR?
Maj Iain Hendry-Adams
2/17RNSWR
Suakin Depot
Lt-Col Susan Smith, SO1 Retention, DGPers-A, responds:
THE issues you raise are as much connected to retention of personnel as they are to pay issues alone.
You may not be aware that legislation affecting Reserve service recently changed and, as a result, all Regular Army personnel separating before compulsory retirement age are now automatically transferred to the Army Reserve on discharge.
These changes will, over time, lead to a pool of very experienced ex-ARA personnel positioned in the Army Reserve manpower pool.
While the new bonuses will reward those currently in the Reserve for their years of service, Army hopes the introduction of these new benefits will also encourage ex-ARA members to give serious consideration to a period of Reserve service once they have settled into their new civilian life.
While the new Reserve personnel initiatives are among the first initiatives to be announced, you might note that a different set of incentives are currently under construction for members of the ARA.
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