Where is Military Superannuation Indexation Step Two?

Share on Social Media


Many a reader will be familiar with the 'Polly waffle' form letters that we continue to receive from both sides of politics when we ask about fair indexation for ALL military superannuants, not just those over 55 who are on DFRB or DFRDB pensions.

In essence they just do not 'get it', or if they do, they doggedly stick to a party line, which does little to honour their constant rhetoric about caring for the troops – currently over 11,000 on MSBS pensions - and their families.

The fact of the matter is that any amount of defined benefit that an MSBS member chooses to take as an indexed pension was always intended to be indexed to maintain its purchasing power, just like DFRDB. That is one of the terms under which ADF people enlisted and served.

An extract, taken from the Member's Guide for DFRDB clearly illustrates the point:

           "What happens when you retire?
            You will get a retirement pension if you complete 20 years' service. You will also qualify if you do 15 years' service and reach the                   retiring age for your rank. Your pension is indesed twice a year to the Consumer Price Index. That way it does not lose value.                   You may take part of your pension as a lump sum but there are limits that apply. " [Emphasis added.]
            Source: http://www.defence.gov.au/dpe/pac/MG_12_3.htm (accessed at 07:30 am, 1 August 2013)

This is a very clear statement, I would have thought!! To now renege on that condition of service for some, and for MSBS members, is despicable, to say the least.

The fact that a factor used for indexation purposes [i.e. CPI] no longer in itself ensures the maintenance of purchasing power, should not be used as an excuse not to alter the factor. After all, it was altered for some DFRDB pensioners on 1 July 2014.

You will agree that all diggers, sailors and airmen now serving under MSBS understood the implied condition of service, in which CPI was cited, as meaning just what applied to DFRDB and which was stated for MSBS in the Military Super Book:

        "4. Attractive lump sum to pension conversion rates for the employer benefit. Pensions are subject to full consumer price index (CPI)                  updating. 

         Upon retirement you can elect to receive your employer benefit as a lump sum, a full pension, or you may elect to take part lump sum          and part pension. If you choose the latter, you must take 50% or more as a pension and the remainder as a lump sum.

         Pensions are subject to full (PI updating every six months (ensuring that $1 in 2011 will be equivalent to $1 in 2028)."                        [Emphasis added.]
         Source: Military Super Book 2011 (page 4)

In other words, the value of MSBS super in payment would be maintained, just like it was promised to be under DFRDB for those who served under that scheme, some of who transferred from that to MSBS. They understood, and rendered honourable service in the knowledge that their defined benefit pensions would be protected through adequate indexation. Note that the cunning B....s have since removed that statement from the latest PDS for MSBS. I wonder if the 'troops' were told about that?

The often-cited and so-called 'generosity' of MSBS is misleading and is an irrelevant red herring. MSBS (including proper indexation) was designed to take into account the unique nature of military service in all of its enduring dimensions, stemming from earlier legislation. Such deliberate design was enshrined in legislation like that - by the Parliament itself. Changing it, in a manner that has retrospective effect, is plainly not just or equitable.

Notwithstanding some of its design flaws, the most important aspect of the MSBS in payment is that it was to be indexed to maintain its purchasing power relative to the rest of the community. As the Hansard clearly shows this was one of the Parliament's founding principles in the design of military superannuation. It is reflected in the enactment of DFRDB in 1977, and remained so for MSBS in 1991. The application of CPI was merely incidental and chosen as an appropriate factor at the time of enactment. It seems that the current Government has now acknowledged the deficiency of CPI by agreeing to change the overall mechanism for DFRDB, but it remains entrenched in discriminatory thinking to not do so for MSBS. 

The facts surrounding this issue have been extensively lobbied about by many associated with the Defence Force Welfare Association (DFWA) and the Alliance of Defence Service Organisations (ADSO), and others. Much detail can be found on DFWA or ADSO web sites.

I hope that all MPs and Senators, especially those on the cross benches, will include this issue in their portfolio of concerns about the manner in which ADF and ex-ADF people are treated. I urge them in turn to raise it within their respective party rooms and the Parliament as a whole. In this particular case, an ex-service officer (now an Assistant Minister of the Crown no less!) appears reticent to address such glaring inequity. I hope that what he says about the issue is merely for public consumption, and that, in reality, he is working exceptionally hard behind the scenes to have the matter addressed. We live in hope ... ...

Recently, Bill Shorten sent out a blurb, which included this:

          "Whoever is leader, Labor is ready to fight for low and middle income Australians, the people hurt most by this Government's unfair                Budget and broken promises.

           My team is focused on policies that will support living standards, support jobs and help families with the cost of living. We believe in a            strong and growing economy that delivers for all Australians and doesn't leave people behind."

As Leader of the Opposition, Mr Shorten has it within his power to legitimately challenge the Government to honour its obligations to ADF personnel, to our veterans and their families; and to work with others within the Parliament to make it happen. Let the 'Light on the Hill', and not the history of political procrastination, guide him.

Let us all continue to press our Parliamentary representatives to take up the baton and fight for the inalienable rights of all members and ex-members of the ADF and their families.

Bert Hoebee
13 February 2015


Gravatar
Colin V Alexander 17.02.2015 (17:40:42)  
Defence superannuation Yes No  

Thanks for the additional information your letter provides with regard to current political skullduggery and inaction on this issue. There are no doubt many members that have accumulated piles of "Polly waffle" greater than my more than insignificant collection.
As I re-read them the only obvious point of significance is their desire for my vote. My DFRDB promised 35% retirement pay now sits at around 19%. Responses from my local member, Joe Hockey, on the matter state "I am always pleased to hear the views of my constituents." That I believe is a lie in itself.
Regardless of the facts, what is written and how it is presented, respect for the unique nature of military service will never be accepted above their own respect for parliamentary service and their own sense of entitlement. This is evidenced by the motions presented and passed in Parliament to recognize the unique nature of military service. Once passed and recorded all have been just as quickly forgotten. The only way this issue will ever be resolved is by legal action or Royal Commission. I am not holding my breath.

 
   
  Edit comment    
Hide comment form Hide comment form

Bold Italic Underline Stroke Quote Ordered List Unordered List Add URL Smileys

:confused: :cool: :cry: :laugh: :lol: :normal: :blush: :rolleyes: :sad: :shocked: :sick: :sleeping: :smile: :surprised: :tongue: :unsure: :whistle: :wink: 

  5000 Characters left

Antispam Refresh image Case sensitive

 

Support and Legals