Superannuation changes to military

bd84 said :

get to retirement age and get very little when the defined benefits plan runs out of money.

The DB plans have already ‘run out of money’, because they never had any in the first place. All federal DB pensions and lump-sums are currently paid for through the annual Budget. This costs $8b per year, out of $370b total federal spending. The Future Fund plans to take over this ~$8b annual expenditure in roughly 2020.

The only way that DB benefits will not be paid is if the federal government chooses not to pay them.

The payments are required by legislation, so non-payment would require a legislative amendment passing parliament.

The majority of those who serve they don’t stay in the ADF till retirement, thus locking away their super in MSBS, unable to roll it over to new employer funds and be subject two twice the management fees etc.

The government needs to not only do away with unfunded schemes but also allow people who have left the ADF the ability to chose where their money should be invested like the rest of the Australian population.

It’s not the amount that is being contributed that is such a problem, it’s the generosity of the benefit when it comes time to pay out. The military scheme should have been closed years ago like the CSS and PSS schemes as they are too generous and vastly underfunded and unlikely to ever be. As much as the military associations can jump up and down flailing their arms, they the option of either telling their members that the can accept closure and join a new accumulation plan to pay for their retirement or get to retirement age and get very little when the defined benefits plan runs out of money.