Publication:Sea Talk Summer 2005/Compulsory retiring age and military superannuation

CRA and MSBS

The Commander Australian Navy Systems Command (CANSC), CDRE Geoff Geraghty, recently held discussion groups with members throughout the Command and this has led to identifying issues of concern for some.

The issues relate to Compulsory Retiring Age (CRA) and the effects on a member's access to superannuation. This article is to dispel some of the myths surrounding CRA and access to superannuation and advise personnel how toobtain advice about superannuation issues.

The ADF stipulates a Compulsory Retirement Age (CRA) for each member according to rank which is legislated in Defence (Personnel) Regulations 2002, and detailed in DI(G) PERS 33-5 (Arrangements for Service in the AustralianDefence Force.)

For the majority of members, a CRA of 55 will apply. However there is an incorrect view that members must find supplementary employment up to the age at which the general community retires at 65 before they can gain access to their superannuation entitlements.

MSBS members are strongly encouraged to read The Military Super Book (available online from www. militarysuper.gov.au) which clearly details superannuation benefits on retirement. The exact form in which benefits can be paidvaries according to:

• the circumstances under which the member leaves the ADF,
• the age at the time of leaving,
• birth date, and
• when the member joined the scheme.

POMT(E)SM Gordon Anderson, who joined the RAN in 1977 after living in Johannesburg, South Africa, served in Oberon Class submarines for 20 years before starting work in Anzac Class frigates. He is currently posted to HMAS Ballarat . Pic by ABPH Justin Brown

The diagram below (The Military Super Book, page 15) provides a summary of Military Super retirement/resignation/redundancy benefits. From the diagram you can see how the following basic example works. PO Smith continues serving in the PN until the CRA age of 55. He was born in July 1962 therefore he has not reached his preservation age of 58. On retirement, PO Smith can access:

• His member benefit accrued before Jul 1, '99 as a lump sum.
• His post 1 Jul 99 member benefit must be preserved in the Military Super Fund (or it can be transferred to another complying fund).
• He can access at least 50% of his employer benefit (less surcharge debt) as a CPI indexed pension. No part of it can be paid to him as a lump sum until he reaches his preservation age (58) and retires from the workforce.

As you can see PO Smith has considerable superannuation choices available to him on retirement at aged 55, including the option of an indexed pension.

Each member will need to consider his or her own personal circumstances but Navy members should not be making decisions about separating from the ADF without first seeking advice from MilitarySuper.

CRA Extensions

Notwithstanding the regulations governing access to superannuation, some members may desire to work in the ADF beyond their CRA and there are two options that will allow them to do this.

The first is to transfer to the Navy Reserve, which has a later CRA (age 60) than permanent ADF members.

The other option for both permanent and reserve members is to seek an extension to their CRA. Details on how to apply for an extension are provided in ABR10 - Sailors' Career Management Manual and ABR 6289 - RAN Officers' Career Management Manual. CRA may be extended to an age not greater than 65 years (special arrangements are made for Chaplains).

How do I obtain advice about MSBS or DFRDB?

ADF members and Defence civilians (including Commanding Officers and Divisional Officers) are not to provide any form of advice or opinion on military superannuation entitlements and benefits.

Information on MSBS benefits must only be provided by the MSB Board of Trustees or their Authorised Representative - ComSuper.

Free Seminars and Individual Consultations

ComSuper manages and runs MSBS membership seminars which are held continuously throughout Australia. They are committed to a membership seminar program designed to help members understand how their military superannuation works (including new ADF members), how benefits accrue, options available during service and the benefits available after discharge. These are run in addition to their participation in Defence Resettlement seminars.

Membership seminars are usually arranged directly with individual establishments, units, and ships upon request. They can be tailored and timed to fit in with operational requirements and to suit the needs of the target audience. For more information on Military Super seminars click on Seminarsin www.militarysuper.gov.au

Individual consultations are now offered to members. Bookings are essential and can be made by phoning 1300 006 727 (select Option 3 when asked). When making an appointment, please tell the information officer of your needs. Then, if you need a benefit estimate, it can be prepared prior tothe appointment.

Contacting COMSUPER

Members seeking information about superannuation entitlements, the payment of benefits or about any other superannuation related matter, can contact ComSuper on:

ComSuper 1300 000 177 www.comsuper.gov.au

MSBS 1300 006 727 www.militarysuper.gov.au

DFRDB 1300 001 677 www.dfrdb.gov.au

Please note: the above information is not financial advice. It is guidance only and members should seek independent financial advice from a certified financial planner whenever they are considering their superannuation options.