Indexation

Over the past thirty years, Governments have failed to honour their obligation to maintain the real value of military superannuation benefits with realistic cost of living adjustments. For retired, invalid and widowed military members, the value of their military superannuation has suffered significant decline causing falling standards of living. It is exactly the same issue that age pensioners agitated to have fixed in the mid-nineties. The Government corrected the problem for them but they have refused to do the same for the military superannuants. This has greatly disadvantaged those who served their country in uniform, leaving them with incomes that fail to maintain purchasing power.
 
The DFWA has been pre-eminet in fighting the case for fair indexation of military superannuation.  A summary of the issue can be found here.. 
 
We have had some success with our "Fair Indexation" Campaign we ran before the 2013 Federal Election, with the Government in 2014 legislating to provide for fair indexation for all DFRDB superannuants over the age of 55 .. but that still leaves all MSBS and those DFRDB recipients under the age of 55 struggling with inadequate CPI indexation of their entitlements.
 
A number of related Research Papers and Government Reports linked to the issue of Fair Indexation are available on this site.  In addition, some related articles are shown below.
 

Further information on the Fair Indexation campaign, including the new indexation arrangements for DFRB and DFRDB superannuants that took effect on 1 July 2014, can be found on the ADSO website.

PRIVATE MEMBERS LOBBYING - JIM HISLOP AND HERB ELLERBOCK.

Reduction of DFRDB Benefits.  On 16 February 2017 Herb Ellerbock made a detail submission to expose a gross reduction and denial of recipient benefits in the Defence Force Retirement and Death Benefits (DFRDB) scheme. Some aspects apply equally to recipients in the Defence Force Retirement Benefits (DFRB) scheme.  Read his detailed submission here.  A response from Government was received.and does nothing to suggest the Government will re-visit the issue, and no reference is made to updating the long out of date life tables. Read the considered rebuttal of the Governmen's response here.  It is clear that the issues were not analysed in any objective manner, and simplly relied on the bureaucrats feeding the same rubbish to the Minister that has been the hallmark of this matter for decades.

- an Executive Summary of the submission includes a link to an online presentation and is well worth a look

December 2018 update: since the above submission was released, their position has changed in the light of new evidence... read their latest here.. 

14 January 2019: Read the article in The Australian here !

Please note that their website provides regular Updates on their lobbying and is the best site for updated information

 

SUPERANNUATION LOSS CALCULATOR

for indextaion pageA superannuant can 'Calculate their own Loss', courtesy SCOA.

THE ISSUE IN SUMMARY

2001 Senate Review Committee concluded that the original intent of Commonwealth was to provide retirement pay/pensions that maintained purchasing power and that CPI was insufficient to meet that contractual criteria. More than a decade on and they are still "spinning their wheels".

The present military superannuation payment represents an unacceptable minimal level.  Governments must maintain the real value of these payments by adopting an appropriate method of indexation.

Military pensions were originally indexed by the CPI to maintain their value relative to national wages. In the last 15-20 years, national standards of living have increased in real terms, which are not reflected if relying on the CPI in its present form. Acknowledging this, in 1997 the then-Government changed the method of indexing the Aged and Service Pensions from CPI to a combination of CPI and Male Total Average Weekly Earnings (MTAWE) and the present Government further extended this formula to include the "Pensioner and Beneficiaries Living Cost Index" to keep pace with increase in prices and improvements in community living standards.

Military retirement and invalidity pensions now stand out as being more harshly treated than almost every other long-term Commonwealth payment that is subject to regular indexing to maintain its value.

We want the Federal Government to adopt the same percentage increase and the same frequency as used for Age and Service pensions for all components of Military retirement pensions (DFRB/DFRDB/MSBS) including the total reversionary pension for partners of deceased military superannuation pensioners.

Click on this image for a bigger version

Click on this image for a bigger version

Note: In this graph, 'Male Total Average Weekly Earnings' (MTAWE) is the base constant (along the zero line) against which the relative cumulative percentage increase or decrease exists with respect to other classes of Commonwealth pensions or superannuation entitlements as shown.

 

Links to some Indexation related matters prior to 2014 are below:

4 September 2009
RESPONSE TO THE MATTHEWS REPORT BY PETER THORNTON
PDF
243 Update - September 2009
Military Justice Dilemma - Phase 2 Living In Accommodation Project - Military Superannuation
PDF
241 Update - July 2009
Review of Military Compensation Arrangements - Superannuation Pension - the Frustration Grows! - Forum: The ADF in Society - Meeting with DFWA Patron
PDF
Media 12 May 2009
Budget 2009-2010 Response - Pension Indexation Failure
PDF
239 Update - May 2009
New Directions for Health ...Oh Really? - Military Superannuants - Let Down Again! ... Oh, and Also Another Inquiry - Partner Service Pensions - The Association's AGM and 50th Anniversary - National Artillery Museum: Why Move? - New Veterans' Mates Website - Reclassification of Defence Co-operation Program Service in East Timor
PDF
237 Update - March 2009
Amalgamation of all the public service and military superannuation boards - ... - Superannuation indexation and the Stimulus package
PDF
Media 3 February 2009
Military Retirement Pensions - Mr Rudd, It is Time To Honour the Nation’s Service Men and Women in Measures to Stimulate Our Economy!
PDF
236 Update - February 2009
ADF Healthcare Trial - the Hidden Tax Slug! - MSBS MBLs - Fair Indexation for ADF Military Retirement Payments - Gulf War Syndrome - British Nuclear Tests in Australia
PDF
23 December 2008
Submission for the 2009-10 Budget• Indexation using the general community standard, ie that used for the Aged and Service pensions, as the military pension indexation rate, to maintain the living standards of military pensioners relative to the general community; • Adjustment of the provisions of “Better Super” affecting military retirement and disability pensions; • Immediate adoption of up to date Life Expectancy Tables for DFRDB commutation arrangements and restoration of the full DFRDB pension after repayment of the lump sum commutation amount for existing DFRDB pension recipients; • Adjustments to Defence widows’ pensions indexation arrangements.
PDF
235 Update - December 2008
Taxation Treatment of Military Schemes - Solomon Islands Health Study - Proposed Budget Initiatives - Only 44 Years For Reason To Prevail - HMAS Voyager Claims
PDF


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