There will be Nunn effects
DPE outlines the changes that will stem from the Nunn Review of ADF renumeration

The flying allowance will attract superannuation benefits once regulations come into effect, one of the major implications of the Government’s decision on the Nunn Review.

ELIGIBLE ADF members are in line for significant benefits following a Government decision on the recommendations of the Nunn Review.

The major changes include:

• The Qualification and Skills elements of flying, specialist operations, special action forces and submarine service allowances will be made superannuable.
  
• Up to 24 weeks of maternity leave will be able to be taken at half pay.
  
• A new flexible salary structure for ADF officers is to be adopted.
  
• The MSBS Retention Bonus will be discontinued for new ADF members, with a clause to protect the entitlement for all existing members.
  

There will be no change in the role or functions of the Defence Force Remuneration Tribunal.

The Nunn Review was an external review of ADF remuneration conducted in 2001 that resulted in a range of recommendations covering the pay-fixing arrangements for the ADF, Reserve remuneration, changes to salary and allowance structures and conditions of service, including housing, leave and superannuation.

Allowances
THE Government’s decision means that 100 per cent of the Qualification and Skill (Q&S) element of the major environmental allowances will be counted as salary for the purposes of superannuation once necessary regulatory changes have been completed.

Those allowances are flying, special action forces, specialist operations, including commandos, 2nd TAG, clearance divers, the IRR and submarine service allowance.

The decision to only superannuate the Q&S elements of these allowances is consistent with the broad industrial principle that payment for enhanced work value or skills over extended periods should be considered to be part of salary (and therefore relevant for superannuation purposes).

Making the Q&S elements of allowances superannuable will begin when the applicable regulations have been gazetted, and the Defpay computer system has been programmed to cater for the changes.
Members will be informed of a date of effect as soon as it is known.

There will be no retrospectivity and anyone in receipt of these allowances who leaves the ADF before the changes take effect will not be eligible for the superannuation benefit arising from the process.

To address specific shortages of air traffic control officers and aerospace engineers, the Minister for Defence recently established two retention allowances.

These allowances are payable in recognition of work force shortage and the need to enhance attraction and retention of members. They address key departure points and attraction deficits and will not be superannuable.

Flexible Pay Structure
MANY of the recommendations in the Nunn Review were incorporated into the ADF Remuneration Reform Project (RRP) being progressed within Defence.

The Government’s decision means that work on the development of a flexible officer pay structure will continue. This part of the project is to reform the structure and is not a pay case.

After development is sufficiently progressed communication will occur on the model and its possible application to ADF Officers. The Directorate of Military Salary and Allowance (Policy) web site will be updated as each aspect is agreed.

MSBS Retention Benefit
THE MSBS Retention Benefit will cease for future ADF members.

The MSBS Retention Benefit provides one year’s salary as a (taxable) bonus to those MSBS members of the rank of sergeant or squadron leader equivalent, or specified category, who reach 15 years of continuous service and agree to undertake a further five years’ service. Allowances are not included as part of salary for the purposes of calculating the bonus.

As a retention benefit, the MSBS bonus has proven ineffective and will be discontinued.

The benefit will be protected for all currently serving MSBS personnel to ensure none are disadvantaged.
Implementation will require changes to the MSBS Act, which may take up to two years to achieve, and all members who are in MSBS up to the date of legislative change will be protected, and have unfettered access to the bonus.
Only members who join after the date of legislative change will have the current entitlement removed.

Leave
THE decision to allow ADF members to take maternity leave at half pay will allow members to chose between taking 12 weeks on full pay or up to 24 weeks on half pay or a mixture of both. This provision has been enacted and was effective from March 1.

The Nunn Review made a number of recommendations in relation to rationalising the number of types of leave and leave administration. The Government agreed to a further internal review of ADF leave, which is under way.

The review aims to look at how to reduce the current complexity in the taking and recording of leave, to reduce overheads and make the system simpler to operate.

It will examine options to rationalise the current leave types through amalgamation, and examine environmental, war service and compassionate and carers’ leave.

Defence Force Remuneration Tribunal
THE DFRT will be maintained as a separate statutory Tribunal responsible for determining specified elements of ADF remuneration.

The role and the governance of the Tribunal will remain as it is, and the office of the Defence Force Advocate will remain. Both factors recognise the significant difference between the ADF and the wider community in the work that we do and the industrial relations system under which we operate.

More information about the effect of the Government’s decision on the Nunn Review recommendations will be available at http://intranet.defence.gov.au/pac/

The Armed Forces Federation of Australia provides its assessment of the review

AFTER much poking, prodding and encouragement over many months, the Government has announced some positive news for ADF personnel flowing from the Nunn Review.

The announcement by Defence Minister Robert Hill and Minister Assisting the Minister for Defence Mal Brough on March 4 will improve superannuation arrangements for around 3800 ADF personnel, improve maternity leave arrangements and safeguard current wage-fixing arrangements for ADF personnel. Not included in the Minister’s announcement, but another Nunn recommendation that will be implemented, is abolition
of the MSBS Retention Benefit.

Superannuation: Once the necessary amendments have been made to the MSBS rules and DFRDB regulations, the Qualification and Skill Components of flying allowance, submarine service allowance, specialist operations allowance and special action forces allowance, will become superannuable. While the change may result in a slight drop in actual take home pay, there will be significant gains in regard to lump sum payments and pension entitlements of ADF personnel. The Federation has been seeking this change for many years and we welcome its implementation as quickly as possible.

Maternity leave at half pay: ADF members proceeding on maternity leave will now have the option of converting their 12-week entitlement to 24 weeks at half pay. Members will recall the Federation has been campaigning for this change since mid-2002 when the entitlement to maternity leave at half pay was provided to Defence civilians and we welcome its introduction. Our next challenge will be to have this entitlement extended to 14 weeks full pay/28 weeks half pay, as has been the case for civilian counterparts since January. The Federation put this to the CDF when we met with him on March 10 and we hope the additional weeks will flow on to ADF members in the not too distant future.

DFRT role preserved: The Federation is pleased the Government chose not to adopt the recommendations of Nunn in regard to the nature and role of the DFRT. This continues to recognise the unique nature of ADF employment and safeguards wage-fixing arrangements well into the future, whatever they may be.

MSBS Retention Benefit: The MSBS Retention Benefit currently available to members who have completed 15 years continuous full-time service and satisfy the rank criteria of sergeant/squadron leader (or specified category) and commit to serve a further five years will be discontinued. We understand the original intent behind the Nunn recommendation that led to that decision was to provide greater flexibility for the Service Chiefs to target specific employment categories requiring retention incentives. It will be interesting to see how this unfolds.

The legislative changes required to discontinue the MSBS Retention Benefit is expected to take up to two years but, regardless of that, the change will not affect current MSBS contributors.

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