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Big Changes to ADF Superannuation from 1 July 2016

Frank Lilley
7th May, 2016

You will probably have heard by now that the superannuation landscape for ADF members is about to change dramatically.

What is changing?

From 1 July 2016, MSBS will be closed to new members, and there will be a new ADF superannuation arrangement (‘the Arrangement’) based on a 16.4% employer (Defence) contribution into a superannuation fund of a members’ choice. In summary, the principal changes are that:

  • All new recruits into the ADF will become members of the Arrangement;
  • Where recruits do not make a choice, the employer’s contributions will be made into a new default fund, called ADF Super;
  • MSBS members will be able to transfer to the Arrangement at any time (but will not be allowed to re-join MSBS if they do switch);
  • MSBS members who leave and then re-join the ADF (before accessing their MSBS employer benefit) either full-time or by rendering continuous full time service (CFTS) will automatically return to MSBS;
  • Serving DFRDB members will not be allowed to transfer to the Arrangement and will continue with DFRDB;
  • Conversely DFRDB members who leave and then re-join the ADF will not be allowed to re-join DFRDB, but will be required to join the Arrangement for their additional service; and
  • Death and invalidity cover for members of the Arrangement will be provided through ADF Cover.

What do I have to do?

If you are a member of MSBS you do not need to do anything. Moving to the new Arrangement is not compulsory. If you decide to move to the Arrangement, you can transfer at any time. However, if you transfer from MSBS, you can’t return. It is therefore important to consider getting independent financial advice before making a decision to move.

If you are a serving member of DFRDB and wish to continue serving full time, you do not need to do anything. If you are thinking about leaving full time service and think that you may at some time conceivably wish to come back on CFTS or re-join, you should consider getting financial advice before making the decision to leave so that you have the full picture of how the new Arrangement may affect you.

You can find a financial adviser through the ADF Financial Advice Referral Program.

Want to know more?

More information on the Arrangement is available at the Commonwealth Superannuation Corporation’s (CSC’s) new website www.adfsuper.gov.au. Information about MSBS and DFRDB is available on the CSC’s main website at www.csc.gov.au. You may also wish to watch the new video on the Arrangement and access other educational information through the Centre’s website www.adfconsumer.gov.au.

Frank Lilley, Operations Manager, ADF Financial Services Consumer Centre

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