Budget closes defined benefit military super
The Government has moved to pare back the generous defence superannuation schemes.
The Budget papers announced that, from 1 July, 2016, the Government would “establish a modern fully funded, accumulation superannuation scheme for new members of the Australian Defence Force (ADF)”.
It said the existing Military Superannuation and Benefits Scheme (MSBS) would be closed to new members from the same date.
The Budget paper said the introduction of new fully funded arrangements would reduce the Government's unfunded superannuation liability by an estimated $126 billion by 2050.
“Existing MSBS members who leave and then rejoin the ADF are able to rejoin their existing MSBS arrangements,” the papers said.
“There will be no change to the superannuation arrangements for existing MSBS members, but they may elect to be covered by the new arrangements.”
It said that under the new arrangements, the Government would pay a 15.4 per cent contribution to a member's chosen superannuation fund, with the contribution rate increasing to 18 per cent for any period in which members were serving in war‑like operations.
The Budget papers said serving ADF personnel covered by the new arrangements would also be covered by statutory death and disability arrangements consistent with the defined benefit arrangement currently in place under the MSBS.
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