HAVE YOU HEARD OF THESE TOP SIX SUPERANNUATION MISUNDERSTANDINGS?

In the complex, mysterious and often opaque world of superannuation, it’s hardly surprising that misunderstandings exist. This article seeks to explain and dispel the top six superannuation misunderstandings that we hear during our extensive education work within the ADF.

1. Joining ADF Super is compulsory.

It isn’t. If you joined the ADF after 30 June 2016, you have a choice of superannuation fund. This means that you may nominate any so-called “complying superannuation fund” into which Defence will contribute 16.4% per annum on top of your salary. However, in the busy world of recruit schools, superannuation isn’t exactly top of mind, so it’s often accepted that ADF Super, administered by the Commonwealth Superannuation Corporation, is compulsory (or at  least, “super is pretty confusing and doesn’t matter all that much at my age, so I’ll go there”).

2. If you join ADF Super, you can’t move to another fund.

Not true. You can move at any time. Of course, you should have a good reason to do so, such as your assessment of returns and fees. And you wouldn’t want to move too often because constantly chasing returns has been shown to be a “fool’s errand”. For most people making such an assessment is seen to be rather too hard, thereby becoming a barrier to action. But is it too hard? Not really. The Australian Taxation Office offers a Superannuation Comparison Tool which lists and rates all the major superannuation funds. You can even personalise your research through your myGov account. 

None of this should be taken as a reflection on the worth of ADF Super. It’s a well run fund, focused especially on the military. It should always be in the mix in your decision making. And of course, having used the ATO Superannuation Comparison Tool, you can move out of your current fund into ADF Super. It’s a two way street.

3. If you’re not in ADF Super, your employer (Defence) will only contribute 12% per annum (the minimum superannuation guarantee amount) into the fund of your choice.

Not true. Whichever fund you choose, Defence will contribute 16.4% per annum. No exceptions.

4. If you’re not with ADF Super, you don’t qualify for ADF Cover, the death and invalidity cover especially designed for military members.

Not true. ADF Cover is a separate scheme. All members for whom Defence contributes 16.4% per annum to the superannuation fund of their choice are automatically eligible for ADF Cover. Again, no exceptions.

The superannuation fund you have chosen should appear on your payslip each fortnight. We recommend you ensure this is correct and contact 1800 DEFENCE if it is not. Crucially though, no matter what super fund you choose, ADF Cover will remain in place for you, through to age 60, while you are serving full time or rendering certain other patterns of service (e.g. SERCAT 6).

5. If you leave the military, you must also leave ADF Super.

Not true. Provided you meet the relevant conditions outlined in the CSC website, you may nominate ADF Super as your fund of choice in your new job. Deciding whether or not you should do it is where the ATO Superannuation Comparison Tool will come in handy.

6. Investments in your post-30 June 2016 superfund of choice cannot go down in value.

Typically, that conclusion is reached because all employers are required to contribute 12% per annum, called the Superannuation Guarantee Contribution(in the case of the ADF, there’s a further 4.4%, making 16.4% per annum). Some people have concluded this means the government guarantees that your account won’t fall in value. Not true (sadly).

The reference to a guarantee only means that employers are required to pay the contribution (and even that doesn’t happen sometimes in the private sector), hence the recent legislation moving employers back to payday superannuation from 1 July 2026 and away from quarterly contributions.

There are many more misunderstandings (even myths) about superannuation, such is the complexity of the subject. But dispelling our top six goes a long way to improving people’s understanding of some quite basic issues that keep coming up in conversations and training.

Like to know more?

Our website includes a wealth of general educational material on superannuation.

Our website also has a list of the most common questions we’re asked about superannuation in the ADF.

Finally, you could test your knowledge on Superannuation with our 10 questions quiz to guide you through many of the most important issues and considerations on superannuation.