Your benefit in MilitarySuper consists of two components:
- Your member benefit – made up of your own fortnightly contributions and the interest which you earn on your contributions, plus any ancillary contributions which are voluntary additional contributions and any transfer you make
- Your employer benefit – which is the government’s contribution to your superannuation; it includes a 3% productivity benefit
When it comes to superannuation, people often just think in terms of their super contributions and investment returns they earn on them. In MilitarySuper, this is your member benefit. But it only comprises part of your overall benefit.
Don’t forget your employer benefit. It is fully funded by the Australian Government and comprises an excellent accrual rate which is government guaranteed and not linked to investment performance. Your employer benefit costs you nothing.
Your member benefit
- It is made up of your fortnightly superannuation contributions plus interest (if you transferred from DFRDB, your member benefit includes your DFRDB contributions plus notional interest on those contributions)
- It is only payable as a lump sum of your contributions plus interest
- You cannot convert it to a MilitarySuper pension.
The value of your member benefit lump sum depends on your contribution rate and investment performance, reflected in daily unit prices.
You do not need to withdraw your member benefit when you leave the Australian Defence Force (ADF). If you wish, you can leave it in MilitarySuper until age 65 where it will continue to grow through your scheme investment earnings.
But if you joined MilitarySuper before 1 July 1999, part of your member benefit is payable as a lump sum when you leave the scheme; the remaining amount can remain preserved until you reach your preservation age and permanently leave the workforce.
Your employer benefit
Its value is determined by your length of service and final average salary (FAS). Your FAS is your average superannuation salary over your last three years of ADF service.
Your employer benefit is a lump sum amount – which consists of two parts:
- A taxed component, representing 3% productivity contributions paid on your behalf by the Department of Defence, plus investment returns
- An untaxed component, representing your remaining employer benefit amount after the tax component is subtracted; it is paid by the Commonwealth.
Generally, you cannot withdraw your employer benefit as a lump sum amount until you reach your preservation age and retire from work or leave employment on or after age 60.
If you leave the ADF from age 55 you can:
- take your employer benefit as a CPI indexed pension
- roll over your employer benefit to another super fund
- take 50% or more of your employer benefit as a CPI indexed pension and preserve your balance in MilitarySuper or another fund.
MilitarySuper: Your Benefit
This video provides an overview of how your MilitarySuper benefit works.