 A common question we get from veterans is how their MilitarySuper benefits operate. What is MilitarySuper? MilitarySuper is a superannuation and benefits scheme which was available to eligible ADF personnel between 1 October 1991 and 30 June 2016. Unlike other funds, MiltarySuper is a hybrid fund. This means that it has both accumulation and defined benefit portions. These portions are called the Member Benefit, the Employer Benefit, and the Ancillary Benefit. Let’s break down an annual statement to show you how each portion is calculated. How to read an annual statement  At the top of your annual statement, you will see this breakdown comparing the opening balance to the closing balance of that financial year. This includes all components—Member, Employer, and Ancillary—as one amount. MilitarySuper refers to this as your “total equity”.  Below that, we can see the breakdown of this equity.
But what do each of these portions mean? How is an Employer Benefit different from the Member Benefit? Employer Benefit Your Employer Benefit is a nominal amount based on an equation. 
 Your Employer Benefit also houses Productivity contributions. This component is a 3% amount paid by Commonwealth that is held within your Employer Benefit. This can only be invested in the “Balanced” investment option.  Your Employer Benefit can then be either withdrawn as a lump sum or a pension once you meet the eligibility criteria. Member Benefit Your Member Benefit is comprised of your compulsory contributions to the fund. Generally, the lowest contribution option is 5%, but you can also opt to contribute up to 10% of your super salary. This will then grow in line with investment performance.  Ancillary Benefit This comprises any other contributions to the fund, such as additional personal contributions, salary sacrifice, co-contributions, and more.  Why did my balance go down dramatically after taking my pension?  When you take your pension, your Employer and Productivity Benefit will reduce to zero as it is converted into your pension. This will cause the amount to drop on your statement, but you will still be accessing it through your pension.
This portion will also go down if you take your Employer Benefit as a lump sum. If you have any other questions regarding how these portions work, you can access the CSC website or get in touch with us. Comments are closed.
|
