On 11 December 2019, the Commonwealth Ombudsman, published a report into the administration of the Defence Force Retirement and Death Benefits (DFRDB) scheme, specifically the issue of commutation. The investigation focused on the accuracy of information about commutation provided to scheme members by the Department of Defence and the Australian Defence Force (Defence), and DFRDB scheme administrators (including the Commonwealth Superannuation Corporation (CSC)).
The Ombudsman found that even though the scheme was administered in accordance with the law, some DFRDB scheme members were provided with misleading, and even incorrect, advice about their rate of retirement pay by Defence. The Ombudsman found this to be defective administration by Defence.
For this reason, the Ombudsman recommended the Secretary of the Department of Defence and Chief of the Defence Force acknowledge these errors and provide a formal apology. This recommendation was accepted and a letter of apology was provided to the Ombudsman and published as part of the report.
The Ombudsman commissioned independent actuarial reports from the Australian Government Actuary and KPMG which determined that it is highly unlikely any ADF members who commuted through the DFRDB scheme would have incurred a financial loss. The Ombudsman found that the modelling conducted by the Australian Government Actuary and KPMG showed that having early access to capital provided by commutation is generally to the substantial benefit of DFRDB members relative to the alternative of not commuting. However, if you believe that you have suffered a detriment as a result of defective administration of the DFRDB Scheme, particularly relating to information provided by scheme administrators and Defence officials about commutation of retirement pay, please visit the Directorate of Special Financial Claims webpage.
If you would like a copy of the letter posted to you, please email email@example.com or write to:
Directorate of Military Remuneration
PO Box 7909
CANBERRA BC ACT 2601