Military Superannution & Benefits Scheme

About MilitarySuper

Last updated: 24 Sep 2024
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  • MilitarySuper provides benefits for members who entered the ADF between 1 October 1991 and 30 June 2016.

  • MilitarySuper is a hybrid fund, providing both Accumulation and Defined Benefits. The Member Benefit and Ancillary Benefit (if applicable) are based on contributions into the fund, plus investment earnings, and the Employer Benefit is determined by a formula.

ADF member directing cargo

How it works

Depending on their circumstances, a MilitarySuper member's benefit may include these components:

  • Member benefit
  • Employer Benefit
  • Ancillary Benefit (if applicable)
  • Member Benefit

    • A contributing member is generally required to make contributions fortnightly at a rate between 5% and 10% of their super salary. They must nominate a rate as a whole percentage, or they’ll default to 5%. These are known as ‘member contributions’.
    • The super salary is the gross annual rate of pay for their rank, increment level and pay group. It includes the annual rate of any recognised allowances that are payable to them.
    • Member contributions will grow in line with investment performance.
    • Once a member reaches their pension maximum benefit limit (PMBL) they won’t be permitted to make any further member contributions unless they separate and re-enter service.
  • Employer Benefit

    The Employer Benefit is a notional amount, determined by the following formula:

     

    Employer Benefit = FAS x EBM

     

    FAS = Final Average Salary. This is calculated over the last 1095 days of service, or total service if a current period of service is less than 1095 days. Super salary is the gross annual rate of pay for rank, increment level and pay group. It includes the annual rate of any recognised allowances that are payable.

    EBM = Employer Benefit Multiple. While a member is contributing to MilitarySuper, their EBM grows with their total years of aggregated service.

    Years of service

    EBM growth per year of service

    Enlistment to 7 years

    0.18

    7 years 1 day to 20 years

    0.23

    20 years 1 day +

    0.28


    Example
    • A member's FAS is $100,000 and they have contributed 8 years of service.
    • The EBM for the first seven years is 7 x 0.18 = 1.26.
    • The EBM for the eighth year is 1 x 0.23 = 0.23.
    • The total EBM is 1.26 + 0.23 = 1.49.
    • The Employer Benefit is $100,000 x 1.49 = $149,000

    Productivity contributions

    The ADF will usually pay 3% of a member's super salary as productivity contributions, until the member reaches their pension MBL, unless they elect to stop contributing earlier. These contributions will grow in line with the default investment option, Balanced. Accumulated productivity contributions form part of the Employer Benefit, with the balance of the Employer Benefit paid from consolidated revenue.

  • Ancillary Benefit

    Members will have an Ancillary Benefit if MilitarySuper receives contributions or rollovers that cannot be paid into their Member or Employer Benefit. This includes any additional personal contributions, transfer amounts, salary sacrifice amounts, government contributions or contributions from ADF to meet Super Guarantee obligations.

    MilitarySuper Ancillary

MilitarySuper Ancillary benefit

Some super contributions can’t be made to DFRDB or MilitarySuper. Instead, they can be paid to a MilitarySuper Ancillary benefit, and claimed as an additional lump sum.

Read more about MilitarySuper Ancillary benefit

Built in Death and Invalidity Cover

MilitarySuper membership includes automatic Death and Invalidity Cover at no cost.

Invalidity benefits

Generally, members are covered for an Invalidity Benefit based on their degree of incapacity for civilian employment. Members will be classified as either Class A (60% or more incapacity), Class B (30% or more but less than 60%) or Class C (less than 30%). If a member is classified as class A or B, benefits are generally payable. 

ADF medical transition (member link) ADF member guide to invalidity (member link)

 

Death benefit

How much is payable?

The benefit payable varies according to whether a member dies:

  • in service (i.e. as a contributing member); or
  • as a pensioner; or
  • after they leave the ADF but before they receive their employer benefit (i.e. as a Preserved Benefit member).

For more information, download our Death and Invalidity benefits booklet.

Who receives Death benefits?

Generally, death benefits are payable to an eligible spouse, eligible children or a legal personal representative such as the executor of the member's estate.

FAQ for MilitarySuper (MSBS)

What is accumulation phase value?

The accumulation phase value (APV) for a MilitarySuper members under age 55 is the total of:

  • Member Benefit; and
  • Ancillary Benefit;
  • less any outstanding surcharge debt.

If the member is age 55 or more, it is the total of:

  • Member Benefit;
  • Ancillary Benefit; and
  • Employer Benefit (including both accumulated productivity contributions and unfunded employer share);
  • less any outstanding surcharge debt.

What is the transfer balance cap?

The transfer balance cap (TBC) is a limit on the total amount of super that can be converted into an income stream. All retirement products are valued and recorded against the cap—the cap and the impacts of exceeding it are managed by the ATO.

The general TBC is indexed by the ATO each year and may be increased in future financial years. For the 2024–25 financial year, the general TBC is $1.9 million. We explain this in more detail in Indexation of the Transfer Balance Cap.

Defined Benefit pensions are drawn from consolidated revenue. The credit calculated in respect of the pension is a notional value. Initially, pensions are valued by multiplying the annual pension entitlement by a factor of 16. The annual pension entitlement is calculated by multiplying the daily rate of pension (i.e. fortnightly pension / 14) by 365. The annual entitlement will be based on the first regular pension payable when the entitlement commences.

For existing pensioners on 1 July 2017 (when the TBC commenced), the pension payment made by CSC on 6 July 2017 was used as the basis of this calculation.

Pension value = fortnightly pension / 14 x 365 x 16

Example: Julie claimed a pension on 1 October 2019. Her first regular fortnightly pension payment was $3,116.44 gross. A value of $1.3 million ($3,116.44 x 14 x 365 x 16) was reported as a credit against Julie's transfer balance account.

Generally, a valuation will only be performed once, and this valuation will be reported to the ATO as a credit. However, a value may be recalculated if retrospective changes are made that affect the original valuation.

If a pension entitlement is permanently reduced in future, we'll report a debit to reflect this change. If a pension entitlement includes both an indexed and non-indexed pension, the combined pension amount will be used for the purpose of the TBC.

Can MilitarySuper members make personal contributions?

Only contributors are eligible to have contributions paid into MilitarySuper.

Non-concessional ‘member contributions’: Members must contribute a minimum of 5% of their salary, unless prohibited by fund rules or SIS. Contributions exceeding 10% are not permitted.

Concessional and non-concessional ‘ancillary contributions’: Ancillary contributions paid by the member, ATO or Department of Defence.

Concessional ‘productivity contributions’: The Department of Defence pay productivity contributions which is 3% of the member’s super salary. Productivity contributions are usually included in the Defined Benefit Contribution (DBC).

The fund will accept certain government contributions for preserved members, including LISC, LISTO and SG OTE (paid by the Department of Defence).

Can my MilitarySuper client salary sacrifice?

To make salary sacrifice contributions, they must be a current contributing MilitarySuper member. A member cannot make salary sacrifice contributions if they are a Preserved Benefit member.

Members cannot claim a personal deductable contribution with MilitarySuper as it is a Defined Benefit government fund.

What are the investment options available to MilitarySuper members?

Members can choose from four investment options for their Member Benefit and Ancillary Benefit. Members can invest their current balance and future contributions (excluding their Employer Benefit) in one or more of these options: Cash, Income Focused, Balanced (default) and Aggressive.

Productivity contributions must be invested in the Balanced option. Associates have investment choice for the funded portion (Associate A) of their benefit.

How is MilitarySuper money invested?

All contributions paid to a MilitarySuper account are invested, but the final value of their Employer Benefit is calculated using the formula FAS x EBM.

The tax components of the Employer Benefit depend on the amount of contributions paid, and the net returns from their investment in the default option over time, minus fees and costs.

The member’s benefit is valued in units. When contributions are received by MilitarySuper, the money ‘buys’ a number of units and the value of each unit is known as the unit price.

The value of their investment can change, depending on investment performance. The costs associated with the purchase or sale of units are reflected in the unit price for each investment option.

What are the investment fees?

Investment fees and costs vary according to the investment option. They are applied equally to all members; the management costs are deducted before the unit price is determined.

Members are not charged for switching investment options.

Is there insurance associated with a MilitarySuper account?

Contributing, preserved, pensioner and associate MilitarySuper members, may have Death and/or Invalidity Benefits with their account. Depending on the type of membership held, Death and/or Invalidity Benefits may be an additional amount added to the existing balance held, just the balance held, or a reduced amount.

These benefits are provided at no cost to members and are not a form of insurance.

What are the Death Benefits including amounts, options and eligibility?

Contributing members who are retired from the military on medical grounds may be eligible to receive an Invalidity benefit. Invalidity and Death Benefits for contributors include prospective service to age 60 unless the member has elected a lower Compulsory Retiring Age (CRA)*.

Preserved/associate members only have access to benefits for TPI and Death and these are based on their account balance. Similar to DFRDB, Invalidity Benefits are classified as Class A, B or C (excluding associates). Death Benefits are payable to a member's eligible spouse and/or children if the member dies while they are either contributing, preserved or in receipt of a MilitarySuper pension (excluding associate pensioners). If a member dies without an eligible spouse and/or children, a benefit may be payable to the member's estate if there is any Residual Capital Value (RCV).

Member Type TPI & Death Partial Disablement Interim Payments Additional Cover Temporary disablement Income protection
Contributing Yes Yes^ Yes~ No No No
Preserved Yes No No No No No
Associate Yes No No No No No

* When CRA was raised to age 60 members had the option of keeping their previous CRA.

~ Members with a pre-99 member component have access to this amount while their Invalidity Classification is being finalised.

^ If this disablement leads to retirement/discharge from the ADF.

NOTE

These benefits are not insurance payments.

MilitarySuper includes automatic Death and Invalidity cover at no cost. Generally, a member is covered for an Invalidity Benefit based on their degree of incapacity for civilian employment. They will be classified as either Class A (60% or more capacity), Class B (30% or more but less than 60%), or Class C (less than 30%). If you’re classified as Class A or B, benefits are generally payable.

Who receives Death Benefits?

When a member dies, their benefit will be paid to any eligible spouse and/or eligible children. If they have no eligible beneficiaries, their benefit will be paid to their estate . MilitarySuper members cannot nominate a beneficiary.

What are the benefit options available for my MilitarySuper client?

The benefit options will depend on their age, mode of exit and retirement status. When claiming their final benefit, contributing and preserved members will generally have the option of a pension, lump sum or combination of both.

If taking a combination of pension and lump sum, the member must convert at least 50% of the Defined Benefit to pension. When claiming their Employer Benefit, a member must withdraw 100% of this component from the fund; there is no option for part preservation of their Employer Benefit. Member and Ancillary Benefits must be claimed as a lump sum, they can't be converted to pension. An associate will only have a pension if their former spouse was in receipt of a pension at the time the payment split occurred. Otherwise, only a lump sum benefit will be payable.

When can my MilitarySuper client take their benefit?

For contributing members, MilitarySuper pensions are usually payable from the day after the member’s separation from eligible service (permanent forces or continuous full-time service) in the Australian Defence Force.

For preserved members, pensions are usually payable from the later of either:

  • the day we receive their valid application; or
  • their 55th birthday.

Flowchart for MSBS preservation

MilitarySuper pensions are paid fortnightly on Thursdays, in the alternate weeks to ADF paydays.

MilitarySuper pensions are typically payable for life and are not impacted by income and asset tests. However, they may impact pensioners' entitlement to payments from Centrelink, Comcare and the Department of Veterans' Affairs.

How is the MilitarySuper pension calculated?

Member Benefit

  • Contributing members are generally required to make contributions fortnightly to their super at a rate between 5% and 10% of your super salary. They must nominate a rate as a whole percentage, or it will default to 5%. These are known as ‘member contributions’.
  • A member’s super salary is their gross annual rate of pay for their rank, increment level, and pay group. It includes the annual rate of any recognised allowances that are payable to them.
  • Member contributions will grow in line with investment performance.
  • Once the member reaches their pension maximum benefit limit (PMBL) they won’t be permitted to make any further member contributions unless they separate and re-enter service.

Employer Benefit

This is a notional amount, determined by the following formula:

Employer Benefit = FAS x EBM

FAS = Final Average Salary. This is calculated over the last 1095 days of service, or total service if the current period of service is less than 1095 days. The super salary is the member’s gross annual rate of pay for their rank, increment level and pay group. It includes the annual rate of any recognised allowances that are payable to them.

EBM = Employer Benefit Multiple. While they’re contributing to MilitarySuper, their EBM grows with the total years of aggregated service.

Years of service EBM growth per year of service
Enlistment to 7 years 0.18
7 years 1 day to 20 years 0.23
20 years 1 day + 0.28

Example:

FAS is $100,000 and you have contributed 8 years of service.

EBM for the first seven years is 7 x 0.18 = 1.26.

EBM for the eighth year is 1 x 0.23 = 0.23.

Total EBM is 1.26 + 0.23 = 1.49.

Employer Benefit is $100,000 x 1.49 = $149,000

Productivity contributions: The ADF will usually pay 3% of a member’s super salary as productivity contributions until they reach their pension MBL, unless they elect to stop contributing earlier. These contributions will grow in line with the default investment option—Balanced. The accumulated productivity contributions form part of their Employer Benefit, with the balance of their Employer Benefit paid from consolidated revenue.

Ancillary Benefit: Members will have an Ancillary Benefit if MilitarySuper receives contributions or rollovers that cannot be paid into their Member or Employer Benefit. This includes any additional personal contributions, transfer amounts, salary sacrifice amounts, government contributions or contributions from ADF to meet super guarantee obligations.

What are the tax implications during the pension phase?

MilitarySuper pensions, other than some Invalidity Benefits, are subject to normal pay as you go (PAYG) tax withholding in the same way your salary is subject to regular tax withholding . However, you may be eligible to receive tax concessions or offsets.

The table outlines the tax treatment of pensions. The Medicare levy is applied where tax is withheld at your marginal tax rate.

Age Tax-free Taxable taxed Taxable untaxed
Under preservation age 0% Marginal tax rate plus the Medicare levy Marginal tax rate plus the Medicare levy
60 and over 0% 0% Marginal tax rate plus the Medicare levy less a 10% offset

*A tax offset of 15% is applied if the pension is a Disability Super Benefit.

#The tax concessions on a member's pension are limited to Defined Benefit amounts less than the Defined Benefit Income Cap, which is $118,750 per annum for the 2023–24 financial year. For this purpose, any benefits from a taxed source are considered first, followed by benefits from an untaxed source. 50% of any benefits from a taxed source that is more than $118,750 per annum will be counted as assessable income. Any untaxed benefit that exceeds $118,750 per annum will not be eligible for a 10% tax offset.

The amount of tax offset a member can claim on their untaxed income is generally limited to $11,875 for the 2023–24 financial year. To work out the amount they can claim, use the ATO Defined Benefit Income Tax tool. For more information visit the ATO.

What are the tax implications for lump sums?

If a member takes part of their benefit as either a pension and/or a lump sum, these may include both tax-free and taxable components in the same proportions as they exist in their total benefit.

The table outlines the tax treatment of lump sums.

Age Tax-free Taxable taxed Taxable untaxed
Under preservation age 0% 20% plus the Medicare levy 30% plus the Medicare levy. Top marginal rate for amounts over the untaxed plan cap amount.
60 and over 0% 0% 15% plus the Medicare levy. Top marginal rate for amounts over the untaxed plan cap amount.

*The low rate cap is indexed annually. For the 2024–25 financial year the cap is $245,000. The low rate cap limits the amount of taxable components (taxed and untaxed elements) of a super lump sum that can receive a lower (or nil) rate of tax. This cap applies to members who have reached their preservation age but are not age 60.

#The untaxed plan cap limits the concessional tax treatment of benefits that have not been subject to contributions tax in the super fund. For the 2024–25 financial year the cap is $1,780,000. For information about the low rate cap or the untaxed plan cap in later years, visit the ATO.

Download more information

Fees and other costs

This document outlines the fees and costs that may be charged. It forms part of the MilitarySuper Product Disclosure statement.

Investment options and risk

This document outlines the investment options available to MilitarySuper members. It forms part of the MilitarySuper Product Disclosure statement.

MilitarySuper Ancillary benefit

Some super contributions can’t be made to DFRDB or MilitarySuper. Instead, they can be paid to a MilitarySuper ancillary benefit, and claimed as an additional lump sum. This factsheet is for DFRDB and MilitarySuper members who have an ancillary benefit.

MilitarySuper

Product Disclosure Statement

Eighth edition, Issued 30 September 2022.

Investment options and risk

This document outlines the investment options available to MilitarySuper members. It forms part of the MilitarySuper Product Disclosure statement.

Fees and other costs

This document outlines the fees and costs that may be charged. It forms part of the MilitarySuper Product Disclosure statement.

Tax and your MilitarySuper

This document outlines how tax can impact a MilitarySuper account. It forms part of the MilitarySuper Product Disclosure statement.

MilitarySuper Death and Invalidity

This document outlines information on MilitarySuper death and invalidity entitlements. It forms part of the MilitarySuper Product Disclosure statement.

Updates to the MilitarySuper investment options and risk booklet

Issued 31 March 2023, this document updates the target asset allocation for the Income Focused investment option disclosed in the MilitarySuper Investment options and risk booklet.

Update to the MilitarySuper Product Disclosure Statement (PDS) and the MilitarySuper Fees and other costs booklet

Issued 27 September 2023, this document updates the Fees and other costs information disclosed in the MilitarySuper PDS and MilitarySuper Fees and other costs booklet.

Update to the MilitarySuper Product Disclosure Statement (PDS) and the Investment options and risk booklet

Issued 1 March 2024, this document updates the asset allocation information in the MilitarySuper PDS and MilitarySuper Investment options and risk booklet.

Address: GPO Box 2252, Canberra ACT 2601

Business hours: 8:30 am to 5 pm (AEST/AEDT), Monday to Friday. Closed ACT public holidays.

Fax: (02) 6275 7010

MEMBERS (Contributing & preserved)

Phone: 1300 006 727 (+61 2 6214 4904

Email: members.adf@contact.csc.gov.au

PENSIONERS (Receiving a pension)

Phone: 1300 001 877 (+61 2 6214 4908

Email: pensions@contact.csc.gov.au