New military superannuation arrangements are on the way and it is important for ADF members to understand these changes which seek to establish ADF Super and ADF Cover on 1 July 2016.
From that date, it is proposed that the current Military Superannuation Benefits Scheme (MSBS) will be closed to new members. New superannuation arrangements will apply to:
Under these arrangements, existing members will be able to choose which superannuation fund they belong to. The default fund for all new permanent members, ADF Super, will be a fully-funded accumulation plan with an employer contribution rate of 15.4 per cent, increasing to 18 per cent during periods of warlike service.
Head, People, Policy and Culture, Richard Oliver said these new arrangements would be the most contemporary military superannuation arrangements available.
“It’s important to note that no current serving members will be required to move to the new arrangements. However if they wish, serving and returning members of MSBS may choose to move to the new arrangements at any time from 1 July 2016.”
Under the new arrangements, members will have the ability to transfer their accumulated benefits to a new fund if they leave the ADF and will no longer be required to make personal contributions, unless they elect to.
According to Head, People Capability, Air Vice-Marshal Anthony Needham, individual circumstances will determine whether changing to the new military superannuation arrangements will provide better value for the individual ADF member.
“If you are a current MSBS member wishing to consider changing to the new military superannuation, I strongly encourage you to seek independent financial advice.
“These new superannuation arrangements will contribute to the flexible career options Project Suakin is delivering,” he said.
The new superannuation arrangements will be underpinned by a death and invalidity scheme that will continue to recognise the unique nature of military service. The new death and invalidity scheme, to be known as ADF Cover, will be consistent with what’s available now under MSBS.
Any members considering options will have ample opportunity to consider the finer details as they are finalised and before the new military superannuation is introduced in July next year.
To find an independent financial adviser, please visit adfconsumer.gov.au
Editor’s note: The phrase “independent financial adviser” in this article is used in the general descriptive sense. The advisers listed under the ADF Financial Advice Referral Program have made declarations to Defence including that they operate free from remuneration-driven conflicts of interest.