TheShadow

In the decade since the method of indexation (i.e. CPI) changed for the Age Pension and other Government funded pensions, these have rightly increased by 51% - Commonwealth superannuation pensions such as DFRDB etc have remained tied to CPI and thus increased by only 29% (i.e. the purchasing power of OZ Defence Pensioners has been eroded at twice the rate)

The pre-elective KRudd promised to review this absolute inequity - but never promised to fix it. The Matthew's report suggested some patchworking but no actual changes. Because of this potentially explosive debacle, the Report has been quietly "put to bed" with nothing further to be said.

That's one of the hidden gotchas in joining today's (or yesterday's) Australian Defence Force. If it was put to recruits up-front at the Recruiting Centre, then how would recruiting suffer? Significantly I'd expect, so that's why the Report has been pigeon-holed without any debate in the House or CDF announcements..

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Captain Sand Dune

Quite true, however KRudd is merely following his predecessors. This has been festering for some time and unfortunately looks like it will continue to do so.
This is exactly why I contribute the bare legal minimum to my military superannuation fund (MSBS), but salary sacrifice the maximum amount to another fund.
BTW, thanks KRudd for reducing the maximum amount I can salary sacrifice to superannuation from $50,000 p.a. to $25,000 p.a. Do you actaully want people to be self funded in their retirements? Typical short-sighted Labour government.

Old Fella

As a recipient of a DFRDB "pension", a quaint name for a superannuation fund to which I contributed for 23 years, I just wonder at which shops, service stations etc those who determine the level of CPI adjustments to apply get their figures.

If anyone believes that there was no increase in the cost of living for the period used to make a determination at the latest adjustment point, when there was no increase, I would like to know what they live on. You can bet your socks that the bureaucrats making the decisions have a much better superannuation outcome than the defence force will ever have, and they only work week-days on fat salaries.

Ginger Beer

I was having a little read recently. Aren't Oz pensions TAX FREE after the age of 65? Is that any pension i.e. personal as opposed to military?

I may be confusing types of pension here and presumably if you retire before 65 you pay normal tax?

The point I make is - there is still a lot to be said of Oz pensions, even if they are CPI tracking?

Ginge

Turkeyslapper

Whilst we are talking about pensions is there likely to be any development or changes in regards to the "preserved amount" or employer contributions in MSBS funds.

I have a couple of hundred K sitting in a MSBS preserved fund earning bugger all (CPI I think) and I can't do anything with it, can't move it etc. So it is not doing too much towards my self funded retirement.

Are other government/state government funds the same?

I have been out of the loop for a while and haven't looked too much at my MSBS fund in recent times so apologies if this is a stupid question.

Thanks

Turkey

UNCTUOUS

From this link (DFWA => Defence Force welfare Assn)

MILITARY SUPERANNUATION PENSIONS (updated 2 October 2009)

The Government announced on 21 August 2009 that it would refuse to provide for ADF families in retirement by adequately indexing their superannuation pensions. The Matthews Report - conveniently released the day Parliament went into recess - blandly recommends that military superannuation schemes continue to be indexed by the CPI. The Government has refused to provide ADF superannuants with adequate protection against cost of living increases despite:

* Six parliamentary inquiries either recommending military superannuation pensions be better indexed or reflecting on the current arrangements.
* The Prime Minister Mr Rudd criticising the Coalition for its failure to implement the findings of these inquiries during the last election campaign along with many Labor candidates who offered their strong support and tempted us with EXPECTATIONS that something would be done – their now convenient about face is offensive. Read what they said here. Also read what Dr Mike Kelly, Labor Candidate and now Member for Eden-Monaro, said - see below !
* The Australian Bureau of Statistics openly stating that the CPI simply does not reflect the cost of living.

WHAT IS IT WE SEEK ?

Quite simply, indexation of your pension using the SAME formula that applies to Aged and Service Pensions. Why should you be treated differently … and why should you have your standard of living continually deteriorate ? Remember you contributed to your superannuation during your working years !

SOME RELATED DOCUMENTS

* The full Matthews Report can be found here.
* A DFWA Facts Sheet on Indexation is here.
* A DFWA Facts Sheet on Defined Vs Accumulation Superannuation Schemes is here.
* A DFWA Facts Sheet on past Government Inquiries is here.
* A graph showing the increases in Aged Pensions, Military Superannuation Pensions and Parliamentary Pensions is here.
* The DFWA Press Release regarding the Matthews Report is here.
* The DFWA Press release on new Indexation arrangements for some Government payments - the PBLCI - is here.
* A comprehensive response to the Matthews Report, written by Peter Thornton and sent to the Minister for Finance and Deregulation, The Hon Lindsay Tanner MP, is here. The Minister's response will be provided when (or if) received.
* NEW ! ADDED 2 OCTOBER 09 ... Our reponse - read our covering letter and our detailed response. Please note that our response places considerable foundation on the initial response made by Peter Thornton, who is a member of not least the DFWA. Our response revisits some of Peter’s assertions by restating and providing additional and qualifying comments. We thank Peter for his assistance and initiative on this matter.
* NEW ! ADDED 5 OCTOBER 2009 ..... Our Press Release regarding our reponse is here

FURTHER INFORMATION

Previous information on this long standing matter is found on this site .. click above Superannuation Indexation.

A TV News Report can be accessed at Retired public servants continue super campaign - ABC News (Australian Broadcasting Corporation)

The comments by Senator Gary Humphries are especially illuminating: “We have here people who make provision for their retirement through belonging to a superannuation scheme, who are getting lower rates of indexation of their pension than people who made no provisions for their superannuation and who receive the aged pension…. that seems to me to be unfair”.

Read Senator Humphries' speech to the Senate about the Matthews Report on 16 September 2009 here.

Related Sites

The following sites provide further information on this matter:

Senator Kate Lundy

SCOA: Superannuated Commonwealth Officers Association

http://militarysuperannuation.for-our.info/

MILSUPER - How we sat idly by...

Both the SCOA and Senator Lundy's site have an excellent article "what will fair indexation cost".

Senator Lundy, along with the three Labor members in the ACT wrote, to Minister Tanner on 14 September 2009: read it here. The letter skirts around MTAWE and promotes PBLCI.

WHAT DID DR MIKE KELLY - MEMBER FOR EDEN-MONARO - HAVE TO SAY ABOUT INDEXATION ?

Read Dr Kelly's 2007 Press Release (at the time he was a candidate for election) where he expressed his full support to changing the indexation arrangements.

As Minister, Dr Kelly subsequently issued two statements in 2008 when the Matthews Report was announced... one immediately followed the other.

Words taken out of Dr Kelly's original release include:

“Clearly after serving Australia for so long Commonwealth civilian and military superannuants deserve a fair go.”

“People retiring now on a Commonwealth superannuation pension of $20,000 will be $7,000 worse off in 20 years time if their pension continues to be indexed by the CPI.

Words added in to Dr Kelly's revised release include:

"...and how this could be accommodated in forward estimates."

"It has placed us in a difficult position with a lot of work to do.”

On 10 September 2009 Dr Kelly released his comment on the Matthews Report. It is interesting to link his suggestion that that Matthews left the door open to a ....".. better measure of the costs of living ..." ... with the advice offered by Peter Thornton, where the shortcmings of the CPI are discussed in some detail. (Note that DFWA does NOT support the use of a new index - the PBLCI - as the permanent solution. An index that properly reflects the cost of living for military superannuants is required).

WHAT CAN YOU DO - A CALL TO ARMS !

The DFWA will continue to campaign on your behalf on this important issue - but YOU can help by:

* Writing to the Prime Minister (Parliament House, Canberra, ACT, 2600) and your Local Federal Member expressing your disappointment, and ask them to support a change to the index formula used for Military Superannuants. For further information read this.

* Supporting the DFWA by considering JOINING US and / or DONATING so the Association can continue doing all that it does. Tax Deductible Donations can be made at any time to : DFWA, PO Box 4166, KINGSTON ACT 2604 ........OR.... by a Direct Deposit to St George Bank, BSB: 112908; ACCOUNT NUMBER: 040019427; A/C NAME: RDFWA.

If making a direct deposit please email the National Treasurer (goodhew@homemail.com.au) advising address details so a receipt can be sent to you.

__________________________________________________ ___________________

OTHER CURRENT MATTERS

Latest UPDATE (added 2 October 2009)

Our response to the Matthews Report (added 2 October 2009)

Submission to the Review of Military Compensation Arrangements (1-7-09)

Response to Budget: Unique Nature of Military Service Recognised (added 16-5-09)

Response to Budget: Defence Pensions Silence (added 16-5-09)

DFWA Statement - Military pensions fade away too (added 24-4-09)

For older items see the Previous Matters page.

OVERTALK

CDF was told that he was NOT to comment upon the Report and has passed this on to the individual service chiefs.

One of the first major KRUDD FUDGEs.

It'd be nice if he ultimately had cause to regret putting this FIX in. However with all serving members gagged, there's little chance of that.

But what about the remainder? i.e. actual superannuants. Many serve on in the Reserves, are expats or "soldier on" as public servants [or have shuffled off this mortal coil, leaving spouse and dependants ignorant of what they're being robbed of].

The KRUDD SS knows that any likely resistance is token and futile and that the media would always find it un-newsworthy.

Captain Sand Dune

I appreciate and totally agree with what UNCTUOUS has posted. However a word of warning to those uniformed members who are contemplating writing to Komrade Krudd. Don't do it!
Should you choose do do so anyway I can guarantee Komrade Krudd will yell at the CDF, who will yell even more loudly at the appropriate Service Chief and so on down the chain. By the time it gets to you the sh!t storm will be of a sufficient magnitude to either end your career or stop it in it's tracks.
We in the ADF do have the same freedoms of speech as those whom are not. It's wrong, it p!sses me off sometimes, but it's a fact nevertheless. Even this website is monitored. If you think you are being anonymous by posting on here you're deluding yourself.
In my opinion you are better off supporting the DFWA, reducing your MSBS contributions to the bare legal minimum required and salary sacrificing to a private fund, and then making your feelings known at the next election.
Finally although I rarely pass up a chance to stick it to a Labour government' I should note that this problem goes back to the Howard years and even before.
As long as the pig-ignorant general public can afford plasma TVs, beer and cigarettes while still on welfare I don't think they give a sh!t about ADF superannuation. It will take bombs on Australia again to do that.

herkman

The previous advice given in this forum is very valid, and to disregard it by any member is paramount of the kiss of death to any member who thinks otherwise.
In 1961 I was serving with 5ACS in Darwin ( I was at that time a LAC) when a burst came around to every member on the base about the then current DFRB system, which was sadly lacking. The submission was made by the base commander, a very long serving member, Group Captain Dixie Chapman. He also called a parade and indicated that by speaking up about how poor the then DFRB system was, he had no doubt that his career was finished.

One must consider that it was just as unsavoury then as it would be today, except I suspect that the aces in the nerve centre in Canberra would by now be even more touchy about the matter.

Dixie was shoved out of the RAAF on medical grounds and not so long ago passed away.

Was saddened to see recently his medals for sale on E Bay, hope it did not mean that his lady was battling to make ends meet.

The Krudds of the world when in the spotlight, say all the right things but as for action for a fair go, that is another story.

Those who are thinking of stirring the stew, need to clearly understand that this government is no different to any previous, as far a defense staff are concerned.

Regards

Col