Stay informed about the Military Superannuation and Benefits Scheme, including details about eligibility, pension amounts, key dates, and recent news. Known as Military Super, this scheme was established by the Military Superannuation and Benefits Act of 1991 to serve the members of the Australian Defence Force (ADF).
Overview of the Military Superannuation Scheme
The Military Superannuation Scheme is a retirement savings plan designed explicitly for ADF members, created under legislation in 1991. It includes both Accumulation and Defined Benefit components. Your Member Benefits and Ancillary Benefits grow based on the contributions you make and the investment returns generated. Every fortnight, members contribute between 5% and 10% of their superannuation salary. If no specific rate is selected, contributions automatically default to 5%.
On the other hand, the employer benefit is calculated using a specific formula that factors in both your salary and length of service. Your super wage is based on your yearly income for your rank and any additional allowances that are recognized. These contributions grow with investment performance over time. Once you reach the Pension Maximum Benefit Limit (MBL), no further contributions can be made unless you exit the military and then rejoin.
Eligibility for Military Superannuation
All contributions made to your Military Super account are invested, with the Employer Benefit being calculated by the formula FAS x EBM (Final Average Salary multiplied by Employer Benefit Multiple). The value of these contributions is determined by the performance of the investment options chosen. As a partially funded defined benefit plan, Military Super offers security based on a combination of contributions and market returns. The scheme came into effect on October 1, 1991, replacing the earlier Defence Force Retirement and Death Benefits Scheme.
Military Super offers four investment options for members’ contributions: Cash, Income-Focused, Aggressive, and Balanced. These options apply to both Member Benefits and Ancillary Benefits. The scheme provides ADF members with access to lump sum payments or pensions based on their Final Average Salary (FAS), helping members prepare for retirement and unexpected events.
Military Superannuation: Pension Amount and Options
When ADF members exit the Military Superannuation Scheme, the benefits they receive vary depending on their circumstances. Typically, Employer Benefits are preserved until the member reaches 55 years of age and leaves the ADF. However, benefits can be paid out earlier in cases of invalidity, redundancy, or death.
Funded Employer Benefits grow based on the performance of the Balanced fund, while unfunded Employer Benefits increase according to the Consumer Price Index (CPI). Upon retirement, members have the choice to receive their Employer Benefit as a pension paid every two weeks, a lump sum, or a combination of both. In contrast, Member and Ancillary Benefits are only payable as lump sums.
Key Military Superannuation Benefits
Here are some of the primary benefits available under the Military Superannuation Scheme:
- Member Benefit: ADF members contribute between 5% and 10% of their salary to their superannuation account. Your super salary includes your total annual pay, along with any recognized allowances. These contributions, deducted directly from your income, grow based on the performance of the chosen investment option. Once you reach the Maximum Benefit Limit (MBL), no further contributions can be made unless you leave and rejoin the service.
- Ancillary Benefits: These include additional contributions such as salary sacrifice, spouse contributions, and personal contributions. If these contributions can’t be directed to your Member or Employer Benefits, they go into your Ancillary Benefit. The ADF generally adds an additional 3% of your super salary in extra contributions until you reach your MBL. These funds grow through the Balanced investment option and become part of your Employer Benefit.
- Employer Benefit: This benefit is calculated using the formula FAS x EBM, where FAS is the average salary over the last 1,095 days of service, and EBM is a multiplier that increases with your length of service. For example, if you have served for eight years with a Final Average Salary of $100,000, your EBM might be 1.49, resulting in an Employer Benefit of $149,000. These benefits are designed to provide financial security for you and your family, both during and after your service with the ADF.
Military Superannuation: Pension Payment Dates and Coverage
As part of the Military Superannuation Scheme, members automatically receive Death and Invalidity Cover at no additional cost. Invalidity benefits depend on the extent of incapacity to engage in civilian work, with classifications such as Class A, Class B, and Class C determining the level of benefits. Members in Class A or Class B typically receive regular payments.
For death benefits, the payout depends on whether the member is still serving, is a pensioner, or has left the ADF but has not yet received their employer benefit. In most cases, the death benefit is provided to an eligible spouse, children, or the member’s legal representative.
This comprehensive scheme ensures that ADF members and their families are financially protected during their service and after retirement.
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