By
Personnel Policy and Employment Conditions Branch, Defence Personnel
Executive
With the Superannuation Choice media blitz, many ADF members
will be wondering “what does it mean for me?” The answer is,
it will not change anything.
The Government has passed new law giving employees the choice
superannuation fund. However, the changes will not affect members
of the ADF.
Most employers have to make contributions to a super fund on
behalf of their employees. Previously, the employer chose the
fund, now most employees can choose, which is why the changes
are called Superannuation Choice.
ADF members are not covered by the changes, so they do not get
to choose a fund in which Defence will pay contributions. There
are good reasons for this. Defence meets its superannuation
obligation to ADF members through the Defence Force Retirement
and Death Benefits (DFRDB) Scheme and the Military Superannuation
and Benefits Scheme (MSBS). These are funded differently from
other super funds.
Most employers only pay the minimum contribution to a superannuation
scheme, which is 9 per cent salary. Defence’s contributions
to the ADF schemes are equivalent on average 23.2 per cent for
MSBS and 33.9 per cent for DFRDB.
The DFRDB and MSBS were carefully designed to meet the special
needs ADF members.
They contain many special provisions such as invalidity benefits,
lifetime pensions, and pensions for eligible dependants. Most
other super schemes do not provide such benefits or charge members
extra for them.
The Government has recognised these special circumstances and
exempted Defence from the new arrangements. This is why Superannuation
Choice does not affect members of the ADF.
While choice of superannuation scheme does not apply to the
ADF, you can still make decisions about superannuation and other
aspects of your personal finances that will affect your retirement
income. For example, depending on which scheme you belong to,
you can choose your level of personal contributions and investment
strategy.
These are important decisions that will influence your quality
of life in retirement. You should consult a licensed professional
who can advise you about your financial affairs before you make
any decisions.
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