Case Study: PSS
Contribution rate increase and ABM
Faith’s story
Faith is 55 years old and a contributing member of PSS.
As a Research Officer with the Department of Veterans’ Affairs, Faith helps people access their family’s military service history. She’s been thinking of retiring in 5 years to write a book that will bring together some of the stories she’s discovered when researching Indigenous service records.
Faith would like to make sure she has a comfortable retirement income so she can focus on writing. She’d also like enough money to visit the remote communities that were home to the Indigenous veterans of her novel.
With only 5 years until she retires, Faith is concerned it may be too late to make any difference to her retirement options.
She’s contacted her adviser because she wants to know if adding extra to her super each pay would mean a better final benefit when she retires.
Faith meets with her adviser
Faith has been contributing at a rate of 5% since joining PSS 20 years ago. She tells her adviser that she is thinking of increasing her contributions to 10% for the next five years, if that gives her a higher final benefit.
Faith’s adviser lets her know that any increase in contributions will positively affect her final benefit amount, which is calculated using the formula Final Average Salary (FAS) x Accrued Benefit Multiple (ABM). As the ABM increases in line with increases to contribution rates, a higher ABM will give Faith a higher final benefit amount.
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“I’ll be retiring in a few years to write my book and travel a little. Is it too late for me to start adding extra to my super each pay?” —Faith |