Military super:major developments

Government seeks public comment on review of Military Superannuation

The fortunes of war, I’ll tell you plain,
Are a wooden leg and a golden chain.

In a masterstroke of obfuscatory timing, the new Federal government has chosen Christmas Eve to seek public comment on its predecessor’s review of military superannuation.

The review makes no less than 11 recommendations in its plan for future superannuation for members of Australia’s military forces.

The main one is that Australia’s defence forces should continue to have their own mandated superannuation scheme, with benefits that reflect the unique nature of military service.

It also says the Defence Department should now close the existing Military Superannuation and Benefits
Scheme to new entrants.

The review recommends that all new military personnel should enter a fresh scheme, based on an accumulation plan for retirement and defined benefits. The new scheme should also include separate defined benefits in case of death or disability.

The review team also recommended that the accumulation plan for retirement should be fully funded and taxed.

It set out six “key elements,” to achieve this objective.

These included:-

-employer contribution rates of 16 per cent of superannuation salary for the first six years of completed service, 23 per cent for the next nine years and 28 per cent after that.

-flexibility for members to select their own contribution rate, with a default rate of 5 per cent of after tax salary.

-members to have a choice over the superannuation scheme to which their contributions will be accepted.

-an option, after 15 years’ service, to purchase an indexed pension.

-a range of options for accessing benefits, after preservation age and

-flexibility for spouses and children of members to contribute, either personally or through an external employer.

The Minister for Defence Science and Personnel, Warren Snowdon, said:”The Rudd government will provide an opportunity for public comment about the review’s findings and recommendations.”

Full details at:http://www.defence.gov.au/militarysuperreview/