View Poll Results: Would you stay in the ADF past ROSO if flying pay was rolled into Super?
Yes - it\'s a good deal
4
25.00%
Yeah - but only until something better comes along
6
37.50%
No - Not even a dozen Virgin nymphomaniac hosties could keep me in post ROSO
6
37.50%
Voters: 16. This poll is closed
ADF aicrew - any news on Super reform?
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ADF aicrew - any news on Super reform?
Was wondering if anyone has heard anymore rumours on the move to rollover flying pay into base wage for Superannuation purposes???
If this occurs, I would imagine that a great many aircrew may think twice about pulling the pin at ROSOs end... it would make a hell of a difference to Super payouts (around 20-30% by my reckoning). Or am I just dreaming?
Of course, it will cost the Government a pretty penny so chances are it may never occur. On that note - amyone else glad they chose MSBS over DFRDB - given MSBS's outstanding performance and the fact it has LOST money this financial year?!?!?
If this occurs, I would imagine that a great many aircrew may think twice about pulling the pin at ROSOs end... it would make a hell of a difference to Super payouts (around 20-30% by my reckoning). Or am I just dreaming?
Of course, it will cost the Government a pretty penny so chances are it may never occur. On that note - amyone else glad they chose MSBS over DFRDB - given MSBS's outstanding performance and the fact it has LOST money this financial year?!?!?
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Macchi,
As far as i remember it has already been rolled in and is official????? Remember CO getting up and chatting about it earlier this year. Even in my dreary eyed state i am pretty sure he said it has already happened?? Anyone care to correct me if i am wrong?
As far as i remember it has already been rolled in and is official????? Remember CO getting up and chatting about it earlier this year. Even in my dreary eyed state i am pretty sure he said it has already happened?? Anyone care to correct me if i am wrong?
Yeah, MSBS is a real winner. Great advice I was given as an 19 year old; "this is the best thing for you new guys, far better benefits than DFRDB"
They don't mind changing the rules every so often when it suits them as well, i.e holding employee contributions on disharge....
Moral; set yourself up, because no government is going to keep us in the style to which we are accustomed!
They don't mind changing the rules every so often when it suits them as well, i.e holding employee contributions on disharge....
Moral; set yourself up, because no government is going to keep us in the style to which we are accustomed!
I don't think that flying pay has been rolled into super just yet. I definitely have not heard anything to suggest that it has. It would be good though!
IMHO, flying pay should either be superannuable or tax free.
Waiting and hoping.
Ruprecht
"...not mother?"
IMHO, flying pay should either be superannuable or tax free.
Waiting and hoping.
Ruprecht
"...not mother?"
MSBS, might not be perfect, but it is still better than DFRDB if you are going to leave early.
Only problem is when you do leave, the notional money that the government has promised to pay into the fund for you, but hasn't done so yet, only grows at CPI. Although that outperforms the fund at the moment, it is not a nice way of saving for retirement. It would be far better for us if we could take the money, and put it somewhere that it would really get to work (like on red at the casino!).
Hope the flying pay thing works out. But that rumour has been around for sooo long, I think it is dead in the water.
Don
Only problem is when you do leave, the notional money that the government has promised to pay into the fund for you, but hasn't done so yet, only grows at CPI. Although that outperforms the fund at the moment, it is not a nice way of saving for retirement. It would be far better for us if we could take the money, and put it somewhere that it would really get to work (like on red at the casino!).
Hope the flying pay thing works out. But that rumour has been around for sooo long, I think it is dead in the water.
Don
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facts?
The rolling in of flying pay to superannuable salary is still on the agenda as far as I know - and I used to be knowledgeable on the subject. Following the so called consultation period Defence has sent its response back to government about the implementation of the nunn review recommendations. Very recently I heard that the costings of rolling in the flying pay are being done (again). I believe that for those on DFRDB the roll in will increase their payout straight away (payout based on final salary), for those on the 'better' system it will take three years to fully impact on retirement pay as the final average salary over the last three years is used. Sounds good, but remember that when it happens you will have to make your 5+% contribution on the amount of flying pay as well, so your take home pay will drop a little.
I agree that MSBS is not a good system. The lack of choice is a key problem. It has a high risk investment strategy which is being demonstrated in poor returns last year and this. The last time I looked we were in negative territory. The money in our 'accounts' is not real. It is a promise from the government that they will pay us that amount when we retire in perhaps 30 years time. In the meantime they can change the rules any time they like, and frequently do. Like many I am already caught in the ridiculous situation where I have a compulsory retirement age of 55, but cannot access full superannuation benefits until I turn 60. They say they will fix it soon, but in the meantime this is a powerful incentive to leave early and set up an alternative superannuation fund through another employer. This is the ultimate in monopoly control. The government is our 'employer' (even though legally ADF personnel are not 'employees'), the government is our funds manager and the government makes the rules. They will tell you it is great because they put in a bigger percentage than required under the superannuation guarrantee. But, as I said it is not real money in a real investment. I think the government should be required to follow the rules they apply to business - ie meet the superannuation liability by setting aside money each year. At the moment they pay pensions out of general revenue. Of course if the government made proper provision for ADF and Public Service superannuation the country would be broke!
I agree that MSBS is not a good system. The lack of choice is a key problem. It has a high risk investment strategy which is being demonstrated in poor returns last year and this. The last time I looked we were in negative territory. The money in our 'accounts' is not real. It is a promise from the government that they will pay us that amount when we retire in perhaps 30 years time. In the meantime they can change the rules any time they like, and frequently do. Like many I am already caught in the ridiculous situation where I have a compulsory retirement age of 55, but cannot access full superannuation benefits until I turn 60. They say they will fix it soon, but in the meantime this is a powerful incentive to leave early and set up an alternative superannuation fund through another employer. This is the ultimate in monopoly control. The government is our 'employer' (even though legally ADF personnel are not 'employees'), the government is our funds manager and the government makes the rules. They will tell you it is great because they put in a bigger percentage than required under the superannuation guarrantee. But, as I said it is not real money in a real investment. I think the government should be required to follow the rules they apply to business - ie meet the superannuation liability by setting aside money each year. At the moment they pay pensions out of general revenue. Of course if the government made proper provision for ADF and Public Service superannuation the country would be broke!
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Did you pick MSBS...? L O S E R ! ! ! !
Gibbo raises a good point... Was there anyone else (like me) who received incredible in-depth financial advice on MSBS vs DFRDB such as:
"If you're going to be in >20 years pick DFRDB, for <20 pick MSBS"?
I guess it's no surprise that the Government of the day wanted the masses to choose MSBS - they stood to save (and are still saving) billions of dollars. As an 18 year old thicko I thought it made sense... Only a few of my mates were smart enough to think "hang on a minute, why would the government want me to change to MSBS so badly - it wouldn't be for MY benefit !!"
20/20 hindsight is a wonderful thing, but I think the way the changeover process was administered sucked. Thank god for anonymous forums like PPrune where I can **** & moan with impotent rage...
Looking forward to this years MSBS "return". We should run a tote on the result. Put me down for -4.8%.
"If you're going to be in >20 years pick DFRDB, for <20 pick MSBS"?
I guess it's no surprise that the Government of the day wanted the masses to choose MSBS - they stood to save (and are still saving) billions of dollars. As an 18 year old thicko I thought it made sense... Only a few of my mates were smart enough to think "hang on a minute, why would the government want me to change to MSBS so badly - it wouldn't be for MY benefit !!"
20/20 hindsight is a wonderful thing, but I think the way the changeover process was administered sucked. Thank god for anonymous forums like PPrune where I can **** & moan with impotent rage...
Looking forward to this years MSBS "return". We should run a tote on the result. Put me down for -4.8%.
MSBS might not be the best super system but it does have significant andvantages. Speaking from experience, if you leave the ADF and rejoin some years later, your previous services count towards the factoring of you employer benefit. Even full time reserve work increases the formula amount. Most people do not comprehend that up to 7 years accumulated service you get 18% of your salary in employer contributions, and it goes to 23% after 7 years, and 28% after 20 years, all with no fees. This is very good by national standards, but as discussed here it only grows by CPI. Unfortunately you cannot yet SAL Sacrifice into MSBS, but they indicated you may be able to soon. Also most civil employers consider super to be part of the renumeration 'package', but ADF employees don't seem to consider super like this.
The rolling of FLYALLOW into salary has not occurred, however I am attending a meeting in Canberra in a few weeks which may indicated the progress in this area -will post here if so.
RM
The rolling of FLYALLOW into salary has not occurred, however I am attending a meeting in Canberra in a few weeks which may indicated the progress in this area -will post here if so.
RM
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Flying pay rollover..? Yippee!
RM,
thanks for the heads-up, will look forward to any news of confirmation on roll-in. It appears that the aptly titled "None Review" (TIC) has been a paper tiger - I am (& I suspect many others also) are on the verge of leaving the ADF based on a bleak superannuation future. Someone previously said that you shouldn't expect your superannuation to provide for your retirement, that you should be making other investments. Well, that's just plain silly - the exact point of superannuation IS to provide for retirement. It should be a low-medium risk, long term investment that when managed sensibly can only result in a profit well above and beyond CPI (thanks to wonder of compounding interest). Obviously whether you can live on it is based on many other factors, but based on my 13 years service (on a good wage) of mostly 10% contributions, if I leave now and rollover all of my super I would barely make $24,000 PA from age 60-80. Quite a lot I hear you say? Not when that amount has to support 2 people beause your wife that has little or no super due to being constantly moved around!
I agree that MSBS does have benefits not found in other Super funds (increased employer contributions, death benefits etc...) but let's face it: a good dictatorship will always be worse than a bad democracy.
As employees we are essentially forced (post 1991) to use it and it alone. The majority of employers allow some autonomy in selection of an employee's fund. Indeed, many funds (eg REST super for the Retail world) allow different investment strategies to be selected (and even changed every quarter) e.g low, medium, high risk etc...
Even if the flying pay is rolled in, what of the majority of defence personnel whose MSBS super is unaffected? I think the ADF is going to have go through major pay reform ASAP if it wants to get its quota of recruits. Let's face it, the average 18 YO today knows 10 times as much about finance and the importance of retirement planning than we ever did - and on paper the Defence just isn't financially promising.
thanks for the heads-up, will look forward to any news of confirmation on roll-in. It appears that the aptly titled "None Review" (TIC) has been a paper tiger - I am (& I suspect many others also) are on the verge of leaving the ADF based on a bleak superannuation future. Someone previously said that you shouldn't expect your superannuation to provide for your retirement, that you should be making other investments. Well, that's just plain silly - the exact point of superannuation IS to provide for retirement. It should be a low-medium risk, long term investment that when managed sensibly can only result in a profit well above and beyond CPI (thanks to wonder of compounding interest). Obviously whether you can live on it is based on many other factors, but based on my 13 years service (on a good wage) of mostly 10% contributions, if I leave now and rollover all of my super I would barely make $24,000 PA from age 60-80. Quite a lot I hear you say? Not when that amount has to support 2 people beause your wife that has little or no super due to being constantly moved around!
I agree that MSBS does have benefits not found in other Super funds (increased employer contributions, death benefits etc...) but let's face it: a good dictatorship will always be worse than a bad democracy.
As employees we are essentially forced (post 1991) to use it and it alone. The majority of employers allow some autonomy in selection of an employee's fund. Indeed, many funds (eg REST super for the Retail world) allow different investment strategies to be selected (and even changed every quarter) e.g low, medium, high risk etc...
Even if the flying pay is rolled in, what of the majority of defence personnel whose MSBS super is unaffected? I think the ADF is going to have go through major pay reform ASAP if it wants to get its quota of recruits. Let's face it, the average 18 YO today knows 10 times as much about finance and the importance of retirement planning than we ever did - and on paper the Defence just isn't financially promising.
MSBS Rocks!!!
Macchi, I'm a betting man so I'll take $50 that MSBS will make >20% this financial year.... NOT!!!!!!!!!!!!
I think all of us MSBS 'winners' know we have been better off investing in either:
1. Mushroom farms,
2. Pine tree plantations,
3. Olive groves, OR
4. Ostriches.
Any of these would have been guaranteed to make more than MSBS!
I think all of us MSBS 'winners' know we have been better off investing in either:
1. Mushroom farms,
2. Pine tree plantations,
3. Olive groves, OR
4. Ostriches.
Any of these would have been guaranteed to make more than MSBS!
Booger and Macchi
I hear you...the MSBS is a typical government 'take three steps forward, one step back' arrangement. But unlike the rest of the super industry, you can be assured that unless your salary drops (unlikely) then your ADF employer benefit is always on the up. If you get promoted, you get a quantum super rise with max benefit after three years at the new rank. This is good - it never drops. So when other funds are draining in 20 years because there are so many retirees, your amount will not drop. But as you rightly pointed out, the benefit of compound interest is lost.
So you decided to put more into the MSBS member side which is funded and so gets compound interest effect! However you are paying tax on this contribution first! You are silly to be putting 10% into the member side of MSBS when you can now salary sacrifice into any other super fund and put away pre-tax dollars - almost doubling your savings.
So using the MSBS employer contribution plus your own salary sacrifice you can have a foot in both super camps. Defence will allow you to sacrifice up to 50% of salary and Service Allow (not other allowances). When you do the sums it is very beneficial for your super. Note I am not a salesman for superannuation, but believe you should get the best from any system.
RM
I hear you...the MSBS is a typical government 'take three steps forward, one step back' arrangement. But unlike the rest of the super industry, you can be assured that unless your salary drops (unlikely) then your ADF employer benefit is always on the up. If you get promoted, you get a quantum super rise with max benefit after three years at the new rank. This is good - it never drops. So when other funds are draining in 20 years because there are so many retirees, your amount will not drop. But as you rightly pointed out, the benefit of compound interest is lost.
So you decided to put more into the MSBS member side which is funded and so gets compound interest effect! However you are paying tax on this contribution first! You are silly to be putting 10% into the member side of MSBS when you can now salary sacrifice into any other super fund and put away pre-tax dollars - almost doubling your savings.
So using the MSBS employer contribution plus your own salary sacrifice you can have a foot in both super camps. Defence will allow you to sacrifice up to 50% of salary and Service Allow (not other allowances). When you do the sums it is very beneficial for your super. Note I am not a salesman for superannuation, but believe you should get the best from any system.
RM
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mmmmm.... Ostriches
Booger - got a phone number for any 'reputable' Ostrich dealers??
RM - I get what you're saying, and I acknowledge that pay & conditions for aircrew in the ADF are light years ahead of where they were 10 years ago. Problem is, people are still leaving in droves! Eventually, someone (with a lot of brass/stripes on their shoulder) is going to have to take on this cause in a BIG way or we'll soon be counting the number of ADF aircrew in double digits.
RM - I get what you're saying, and I acknowledge that pay & conditions for aircrew in the ADF are light years ahead of where they were 10 years ago. Problem is, people are still leaving in droves! Eventually, someone (with a lot of brass/stripes on their shoulder) is going to have to take on this cause in a BIG way or we'll soon be counting the number of ADF aircrew in double digits.
Macchi,
Do you realy think that a reform of MSBS is going to keep people in the RAAF? Pay after the last flying pay increase is not bad now, in fact you will for the first time ever, take a cut for the first couple of years if you leave and go to QF. And this made no difference to the number of people leaving. The only thing that determines the number of pilots that leave the ADF, is how many airlines are recruiting at that time.
This has always been the case, and will continue to be so. It is good that people are trained, do a couple of tours and leave. This is how the young guys get a chance to get an early command and learn what responsability is all about.
I think as guys get a bit older, lifestyle becomes a bigger issue. The idea of moving every three years for the rest of my life, and eventually getting a ground job, and then only ground jobs as I became older, were the reasons I left. it was not about the money, as I was happy with my lot. Still I paid only the min into MSBS, and invested elsewhere with the rest, as did most of my peers.
So mate, hand on heart, I think a reform of MSBS will make naff all difference to pilot retention rates. People do not leave because of the flying (think of those QF mates that sit in the back seat watching others fly for years before becoming a FO, and finally getting a take-off or landing!), and I don't think many leave because of the money or MSBS. But I do think a lot leave because of lifestyle, and they want the power to determine what they do in their life.
I do hope flying pay does become allowed for super purposes, as I think it is unjust for it to be included for Super surcharge, but excluded from super payouts!
If you are really peeved about MSBS, find a finiancial advisor, and work out your own saving for the future plan!
Don
Do you realy think that a reform of MSBS is going to keep people in the RAAF? Pay after the last flying pay increase is not bad now, in fact you will for the first time ever, take a cut for the first couple of years if you leave and go to QF. And this made no difference to the number of people leaving. The only thing that determines the number of pilots that leave the ADF, is how many airlines are recruiting at that time.
This has always been the case, and will continue to be so. It is good that people are trained, do a couple of tours and leave. This is how the young guys get a chance to get an early command and learn what responsability is all about.
I think as guys get a bit older, lifestyle becomes a bigger issue. The idea of moving every three years for the rest of my life, and eventually getting a ground job, and then only ground jobs as I became older, were the reasons I left. it was not about the money, as I was happy with my lot. Still I paid only the min into MSBS, and invested elsewhere with the rest, as did most of my peers.
So mate, hand on heart, I think a reform of MSBS will make naff all difference to pilot retention rates. People do not leave because of the flying (think of those QF mates that sit in the back seat watching others fly for years before becoming a FO, and finally getting a take-off or landing!), and I don't think many leave because of the money or MSBS. But I do think a lot leave because of lifestyle, and they want the power to determine what they do in their life.
I do hope flying pay does become allowed for super purposes, as I think it is unjust for it to be included for Super surcharge, but excluded from super payouts!
If you are really peeved about MSBS, find a finiancial advisor, and work out your own saving for the future plan!
Don
Well said, Don.
I used to say that people left the RAAF for 3 things;
Flying until you retire, locational stability and more money.
The RAAF, by it's nature cannot provide the first or the second, which is why it has to try with the third. I'm not saying that more money would keep me in, but I'd be more than willing to take it!
Realistically, though, if the RAAF wants to keep experienced people in, then it will take a major restructure of the system.
ruprecht
I used to say that people left the RAAF for 3 things;
Flying until you retire, locational stability and more money.
The RAAF, by it's nature cannot provide the first or the second, which is why it has to try with the third. I'm not saying that more money would keep me in, but I'd be more than willing to take it!
Realistically, though, if the RAAF wants to keep experienced people in, then it will take a major restructure of the system.
ruprecht
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Same problem with us on the Army side of things I'm afraid. While we are less likely to get anywhere with the airlines, and pay for comparitive helo jobs in civi street is generally way less than HRH pays us, our guys are still leaving in droves. The chance of spending the rest of your life bouncing between postings in Oakey, Townsville and Darwin, and the squeeze of ever increasing tasking vs an ever worsening manning situation is often enough for the guys to make the leap. A lot of them are leaving to non flying jobs (Lawn Mowing businesses etc etc).
Interestingly enough, I think the powers that be may be concerned that a roll-in of allowances may have a short-term detrimental effect on retension. All the olds and bolds (20 years plus I guess) on DFRDB only need one day at the new pay level to get the increased payout, as opposed to the three year average for MSBS (wonder which table jockey thought up that little jem?).
My feeling is, stay as long as I can keep doing interesting flying that provides Jo Taxpayer with a service, and when I feel the need to move on (soon, I fear) then do so with no bitterness to a system that I cant change anyway. Oh, and invest like crazy while I'm making the $$.
Interestingly enough, I think the powers that be may be concerned that a roll-in of allowances may have a short-term detrimental effect on retension. All the olds and bolds (20 years plus I guess) on DFRDB only need one day at the new pay level to get the increased payout, as opposed to the three year average for MSBS (wonder which table jockey thought up that little jem?).
My feeling is, stay as long as I can keep doing interesting flying that provides Jo Taxpayer with a service, and when I feel the need to move on (soon, I fear) then do so with no bitterness to a system that I cant change anyway. Oh, and invest like crazy while I'm making the $$.
