New Superannuation scheme for Defence
The Government today introduced legislation establishing a new military superannuation scheme for members of the Australian Defence Force (ADF) and accompanying legislation to enable ADF members to work part time.
The new military superannuation scheme, to be known as ADF Super, will for the first time allow ADF members to join the superannuation fund of their choice. They will also have access to a default military superannuation fund.
ADF Super fixes one of the longest running grievances of the veteran and ex-service community, namely the lack of flexibility and portability of a member’s superannuation benefit.
In recognition of the unique nature of military service ADF Super members will receive an employer contribution rate of 16.4 per cent, regardless of the superannuation fund they choose.
This rate is higher than that offered to Australian Public Servants (15.4 per cent) and significantly higher than the 9.5 per cent available to the majority of Australians through the Superannuation Guarantee.
ADF Super will apply to ADF members who join on and after 1 July 2016. Additionally, members of the current Military Superannuation and Benefits Scheme (MSBS) may choose to move to the new scheme or remain in the current scheme – they will not be compelled to move to ADF Super. The MSBS will be closed to new entrants from 1 July 2016.
Due to the unique nature of military service it is often difficult for ADF members to obtain death and invalidity cover at a reasonable cost.
To ensure ADF members continue to receive full death and invalidity cover the Government is also establishing ADF Cover, which will provide death and invalidity cover consistent with that provided to members of the current MSBS.
Accompanying the introduction of ADF Super and ADF Cover is legislation that will provide for significantly more flexible service for permanent ADF members. ADF members will, for the first time, be able to seek part-time work arrangements, subject to Defence’s capability requirements.
This significant improvement to the ADF’s workforce model will provide additional flexibility for members of the military while also improving the ADF’s ability to recruit and retain personnel.
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Well said Brian, as a former professional soldier and with over 15 years as a self employed financial planner I look forward to the day I can access my own Military Super and helping other current or former defence members make the right decisions about not just their super but their futures more importantly.
Steven Hallam
Hallam Financial Strategies.
http://www.hfstrategies.com.au
Will I be able to roll over my preserved benefit to another Super fund now?
Hi Thommo. My guess is that it will take some weeks if not months for the new system to get up and running – at which time you may be able to roll over your funds.
That said, however, you really need to seek advice from a financial professional, not just on the question of when you can transfer, but on the more important question of whether it suits your personal circumstance or not.
I cannot give you financial advice.
Brian Hartigan
Managing Editor
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