Overview for New Recruits
- Introduction
- MilitarySuper: A Great Scheme
- What MilitarySuper Offers You
- Is Membership Compulsory?
- What am I Entitled to when I Retire?
- Leaving the ADF
- Resigning and your Superannuation
- Retirement Before Preservation Age
- Death While a Member of the ADF
- Orphan Entitlements
- No Dependants
- Your Investment Options
- Growth Strategy
- Cash Strategy
- Conservative Strategy
- Balanced Strategy
- High Growth Strategy
- General Note
- Viewing Your Details Online
- Online Forms
- Member Statements
- Contact Details
Introduction
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This online seminar is designed to give new Military Personnel a basic grounding in MilitarySuper. Some of the topics to be discussed include how the scheme works, contributions which you are required to make, and others which you may choose to make, and the range of investment options from which you can choose for those contributions. It also provides an outline of resignation, retirement and death benefits which become payable if you die while a member of the ADF. A separate online seminar is available which outlines invalidity benefits. If your specific queries are not answered your Pay Office can provide you with fact sheets on particular topics of interest or they can be downloaded from this website. You can check out the MilitarySuper Book, also available on this website, or contact the Customer Service Centre.
This seminar will also address other general queries that Members approach the Customer Service Centre with.
MilitarySuper: A Great Scheme
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Membership of an employer-sponsored superannuation scheme like MilitarySuper provides you an income when you leave the workforce, and helps provide security during your working life by covering you and your dependants in the event of invalidity retirement or death. Invalidity and death cover is provided at no cost to Members.
New Members often want to know 'What are the benefits of MilitarySuper?' and 'What makes MilitarySuper different from other schemes?'.
Unlike other schemes, MilitarySuper is specifically designed to meet the needs of Members of the Australian Defence Force (ADF) and to reflect the special nature of military service.
As a Member of MilitarySuper, you enjoy:
- A significant Employer Benefit (18% to 28% of final average salary per year of service) which is government guaranteed and not directly linked to investment performance.
- Excellent invalidity and dependants' benefits.
- An attractive pension option. Pensions are indexed twice a year to keep up with inflation.
- No administration fees or charges.
- A Member Benefit which accumulates separately from your Employer Benefit.
- The opportunity to make voluntary Ancillary Contributions, and
- Investment choices for your Member Benefit and Ancillary Contributions
What MilitarySuper Offers You
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MilitarySuper offers you:
- retirement benefits that become fully available when you leave the workforce after reaching your preservation age
- invalidity benefits if you are forced to leave for medical reasons
- benefits to your dependants when you die provided eligibility criteria are satisfied
- a range of voluntary Ancillary Benefits
Is Membership Compulsory?
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Yes, all new ADF entrants must become Members of MilitarySuper. Generally a reservist on continuous full time service must also contribute.
You must contribute 5 per cent of your superannuation salary into the Fund. However, if you can afford it, you may increase your contributions to a maximum of 10 per cent, in multiples of 1 per cent. Your contributions will be deducted automatically from your pay every fortnight.
You may also choose to make additional voluntary superannuation contributions known as Ancillary Contributions.
What am i Entitled to when I Retire?
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Firstly, your MilitarySuper benefits consist of three parts:
- a Member Benefit, made up of your own fortnightly contributions and the interest that they earn
- an Employer Benefit, which is the Government's contribution to your superannuation. Your Employer Benefit includes a 3 per cent productivity benefit
- any Ancillary Benefit, which comprises voluntary Ancillary Contributions or amounts transferred to MilitarySuper from another Fund.
Leaving the ADF
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So, to recap, your Employer Benefit is paid for entirely by your employer. Only part of it is funded, i.e. your employer regularly pays productivity contributions into the MilitarySuper Fund whilst you are contributing and the rest (representing the bulk of the Employer Benefit) is paid by your employer out of consolidated revenue when you claim your benefits.
Your own contributions plus investment returns make up your Member Benefit, while ancillary contributions plus investment return make up your Ancillary Benefit. It is only these amounts plus the funded employer productivity amount which are invested in the MSB Fund.
After leaving the ADF, from age 55 you can either:
- take your Employer Benefit as a CPI indexed pension
- roll over your Employer Benefit to another superannuation Fund, or
- take 50 per cent or more of your Employer Benefit as an indexed pension and preserve the balance in MilitarySuper or in a rollover Fund; but you generally cannot take your Employer Benefit as a lump sum until you reach your preservation age.
Generally your Ancillary Benefit, which is payable as a lump sum only, can be taken when you permanently retire from the workforce. You can roll this over to a fund of your choice at any time.
You may also have other entitlements if you are leaving the full time ADF on invalidity grounds. Check out the Invalidity Online Seminar, available on this website, for more information.
Resigning and your Superannuation
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If you resign before reaching your preservation age or your compulsory retiring age (sometimes referred to as 'retiring age for rank') your Member Benefit is preserved in MilitarySuper or an approved rollover fund. Your Employer Benefit is preserved in MilitarySuper.
Retirement Before Preservation Age
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If you resign before reaching your preservation age but have reached your retiring age for rank, your Member Benefit is preserved in MilitarySuper or an approved rollover fund. The difference is your Employer Benefit can either be paid as an indexed pension or preserved in MilitarySuper.
This applies also if you are leaving the ADF on redundancy.
Death While a Member of the ADF
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If you die whilst a contributor to MilitarySuper, your eligible dependants (if applicable) are entitled to benefits as follows:
Your spouse is entitled to:
- a lump sum of your Member Benefit and
- depending on circumstances your Employer Benefit is payable either as a CPI indexed pension, a part pension and part lump sum or a full lump sum. If the Employer Benefit is taken as a pension and there are eligible children the rate of pension is increased by 11% for each additional child up to a maximum of an additional 33% for three or more eligible children.
Orphan Entitlements
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Or, your orphan is entitled to receive the Member Benefit lump sum, plus an employer-financed pension (based on a notional invalidity pension).
The pension rate increases depending on the number of eligible orphans.
Your eligible dependants will also be entitled to benefits if you die while a preserved benefit member or a pensioner. Further details are available from fact sheets available from your Pay Office or this website. You can also check out the MilitarySuper book or contact the Customer Service Centre.
No Dependants
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If you have no dependents your Estate will receive a benefit comprising the total of your Member Benefit and a full lump sum based on a notional invalidity benefit at the time of death.
Entitlements do vary depending on certain conditions and your situation at the time of death. More detail is available from the MilitarySuper book, the MS04 fact sheet - Death and Dependants' Benefits, both available on this site, or by contacting the Customer Service Centre.
Your Investment Options
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Investment choice is available to all Members of MilitarySuper and gives you the flexibility to choose how to invest your Member Benefit and / or Ancillary Benefit. In doing so it is worth remembering that as a general principle superannuation is a long term investment.
MilitarySuper offers you a choice of five investment strategies.
You can choose one or a combination of strategies. You can change your strategy at any time in the future. You should keep in mind that life changes and your investment timeframe and tolerance to risk may also change. From time to time, you should review how your super is invested to make sure it continues to meet your needs. You should keep in mind that generally speaking you will not be able to claim your benefit as a lump sum until you reach age 55. You can rollover your Member Benefit to a fund of choice if you leave the ADF earlier.
If you don't want to make a choice, your Member Benefit and/or Ancillary Benefit will continue to be invested in the Default strategy which is the Growth strategy. A default option is activated if no other election is made by the member.
Growth Strategy
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This strategy invests mainly in assets with growth characteristics. Its investment objective is to generate absolute returns of ten percent (net) per annum over most rolling five year periods. The likelihood of a negative return is approximately one year in seven meaning the Growth strategy provides a moderate level of risk.
It may be suitable if there are more than six years before you are eligible to claim your Super and you wish to achieve an attractive return over the longer term and are able to tolerate a reasonably high level of variability over the short term.
Cash Strategy
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This strategy aims to maximise protection against capital loss and invests only in secure cash investments such as bank deposits, bills, mortgages and short-term funds. Its objective is to achieve returns that match the UBS Bank Bill Index over a one year period. As such it provides a low level of risk.
This strategy may be suitable if you are eligible to claim your super within two years, and your most important consideration is avoiding a negative return in any one year.
Conservative Strategy
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This strategy invests in a conservative mix of assets, mostly debt instruments, with some investment in shares and property. It seeks to achieve returns that are greater than one percent (net) over the UBS Bank Bill Index over most rolling three year periods and constitutes a low level of risk.
This strategy may be suitable if you have two to five years until you are eligible to claim your super; and you are able to tolerate a degree of variability of returns over the short term with a view to achieving a reasonable return over the medium term.
Balanced Strategy
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This strategy invests in a diversified mix of assets such as debt instruments, but with a bias towards Growth Assets. The investment objective here is to achieve returns of eight percent net over a rolling five year period. The Balanced investment option offers a moderately low level of risk, with the likelihood of a negative return approximately one year in eight.
This strategy may be suitable if you have five to seven years until you are eligible to claim your super and you wish to achieve a relatively attractive return over the longer term, while being able to tolerate a moderately high level of variability in returns over the short term.
High Growth Strategy
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This is the most aggressive investment strategy. It invests totally in growth assets, with no direct investment in cash or debt instruments such as fixed interest. The option's current high dependence on returns generated by listed equity markets is being reduced through increased allocation to unlisted alternative growth assets such as Private Equity, Infrastructure, Property and Uncorrelated Alpha products such as hedge funds.
The High Growth Strategy objective is to achieve absolute returns of 11 percent (net) per annum over most rolling seven year periods. It constitutes a moderately high level of risk with the likelihood of a negative return approximately one year in six.
This strategy may be suitable if you have seven or more years until you are eligible to claim your super and you wish to achieve an attractive return over the longer term while being able to tolerate a higher level of variability in returns over the short term.
General Note
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Before making an investment choice you should read the MilitarySuper publication Your Guide to Investment Choice, available on this website.
Please note: This is general information only and has been prepared without taking account of your personal objectives, financial situation or needs. Therefore before acting on any such general information you should consider its appropriateness given your own financial situation or needs. You may wish to do so with or without the assistance of a licensed financial advisor.
Viewing Your Details Online
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Member Services Online offers you a range of services to help you monitor and manage your super. You can:
- use the i-Estimator to project your potential final benefit
- view and print your Member statement
- change contact details
To login to this service you need an Access Number. If you do not have an Access Number please complete an Access Number Application form and send it to us.
Online Forms
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These forms can be found on this website by selecting 'Member Services Online' from the Member Services drop down menu on the home page. Please note that Access Numbers can only be returned by post. No Access Numbers will be sent by fax or email.
Alternatively please ring the MilitarySuper Customer Service Centre on 1300 006 727 and a Customer Service Representative will provide you with an Access Number over the phone provided you can verify your identity.
Member Statements
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You will receive an annual report from the MSB Board prior to 31 December every year. It will comprise your annual Member Statement and annual Fund report. The Member statement details your accumulated contributions to the Scheme at 30 June in that year. The statement also provides you with information about your length of contributory service, your salary for superannuation purposes and an approximation of your share of investment management costs that have been deducted before unit prices are declared. Your statement will not show any administrative fees and charges such as entry, exit and account keeping fees as these are met by the Department of Defence.. The annual Fund report provides details on the performance of the fund including each individual strategy to make it easy for you to track performance.
Contact Details
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Finally, the best place to seek information, answers to questions and initial advice is the MilitarySuper Customer Service Centre.
To speak to an experienced information officer about any superannuation related matter, please ring 1300 006 727 or 1300 001 877 (for pensioners).
Members overseas, please call the switchboard on 02 6272 9000.
Fax forms and queries to us on either
(02) 6272 9617 or
(02) 6272 9618
or pop it in the mail to:
MilitarySuper
PO Box 22
BELCONNEN ACT 2616
You can also email your enquiry by visiting the contact us page of this website.