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.

2017 Submission on Reduction of DFRDB Benefits.  On 16 February 2017 Herb Ellercock 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 has not yet been received.

for indextaion page

SUPERANNUATION LOSS CALCULATOR

A superannuant can 'Calculate their own Loss', courtesy SCOA.

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:

MESSAGE TO OUR MEMBERS JUNE 2011
PDF
30 June 2011
Fair Indexation for Military Superannuation Pensioners - FAQ
PDF
Richardson 8 June 2011
David Richardson: Accounting for a super mystery
Weblink
261 Update - June 2011
Senate turns its back on the ADT - Defence families of Australia Survey - Operational Allowances - ADF Workplace Renumeration Arrangement - Farewell CDF and Service Chiefs
PDF
260 Update - May 2011
Mr Tanner called to account - Defence Submission misses the point - Greens On Notice ! - Dept of Finance Claims a Respective Upgradel - Budget Disappoints
PDF
14 April 2011
A SUBMISSION BY THE ALLIANCE OF DEFENCE SERVICE ORGANISATIONS (ADSO) TO THE SENATE FINANCE AND PUBLIC ADMINISTRATION COMMITTEE INQUIRY INTO THE DEFENCE FORCE RETIREMENT AND DEATH BENEFITS AMENDMENT (FAIR INDEXATION) BILL
PDF
13 April 2011
Thornton's Submission for Senate Inquiry into the funding of the ‘Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Bill 2010’
PDF
13 April 2011
THORNTON RESPONSE TO THE FEBRUARY 2011 FINANCE UPDATE REGARDING COMMONWEALTH & MILITARY SUPERANNUATION (Rev1_5_Apr_11)
PDF
259 Update - April 2011
The ADFA Incident - Military Court of Australia - Senate Inquiry - Fair Indexation Bill - Minister Wong offers Tacit Support
PDF
23 March 2011
ESO Issues Paper 2010-11 Rev 2
PDF


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