Commonwealth Superannuation Corporation Annual Report 2017–18

7. Our Superannuation Schemes

DFRB, DFRDB and DFSPB

Defence Forces Retirement Benefits

Defence Force Retirement & Death Benefits

Defence Force (Superannuation) (Productivity Benefit)

Overview of DFRB

DFRB is a closed military scheme with no contributing members. Established in 1948 by the DFRB Act, this scheme closed to new contributors on 30 September 1972 (contributing members at that time automatically transferred to DFRDB on 1 October 1972). DFRB continues to provide the benefit entitlements of members who ceased to be contributors before 1 October 1972 and for reversionary benefits to eligible spouses and children.

Overview of DFRDB

DFRDB is also a closed military defined benefit scheme. Established by the DFRDB Act, the scheme closed to new ADF entrants on 1 October 1991 when MilitarySuper was established. DFRDB provides superannuation for ADF members who became contributors on or after 1 October 1972 and for contributors of DFRB on 30 September 1972 who compulsorily transferred to DFRDB on 1 October 1972.

Overview of DFSPB

DFRDB members are also entitled to a productivity benefit under the Defence Force (Superannuation) (Productivity Benefit) Determination (DFSPB), issued under the Defence Act 1903. It is paid by the Department of Defence when a member’s DFRDB benefits are paid.

Membership

DFRB

Figure 19. DFRB pensioners over five years

Note: Figures are at 30 June of each year; ‘pensioners’ represent the number of pension accounts, not the exact number of pensions (e.g. multiple recipients such as a spouse and orphan children may be paid under one account).

DFRDB

Figure 20. DFRDB members and pensioners over five years

Note: Figures are at 30 June of each year; ‘pensioners’ represent the number of pension accounts, not the exact number of pensions (e.g. multiple recipients such as a spouse and orphan children may be paid under one account); pensioners who re-enter for less than 12 months do not contribute to DFRDB, continue to receive a pension and are not eligible for invalidity; pensioners who re-enter for more than 12 months become contributors, their pension is suspended and they are eligible for invalidity.

Scheme administration

DFRDB member contributions

DFRDB members contribute 5.5% of their fortnightly salary for super purposes until they reach 40 years of effective service, at which time they can no longer contribute. Contributors can also make voluntary payments into MilitarySuper, known as ancillary contributions (refer to the MilitarySuper part for details).

Figure 21. DFRDB member contributions over five years

DFRDB benefit payments

Lump sum payments

DFRDB members retiring from the ADF can commute part of their DFRDB benefit to receive early payment of their retirement pension as a lump sum (commutation amount). In this case, their retirement pension is permanently reduced irrespective of how long they live. Retiring members can receive a maximum commutation lump sum of up to five times the value of their annual pension.

Figure 22. DFRDB lump sum payments over five years

Invalidity benefits

DFRDB provides benefits for partial invalidity, full invalidity and death. If a member becomes disabled and unable to continue their ADF service, invalidity benefits help them to resettle into civilian employment.

There are three levels of invalidity benefit classifications:

• Class A: Significant incapacity
• Class B: Moderate incapacity
• Class C: Low incapacity (no entitlement to an invalidity pension).

Table 39. New invalidity classifications in DFRDB

	2016–17	2017–18
Initial classifications	56	58
Pensions granted	56	54
Pensions not granted	0	4

Note: These figures may vary slightly to invalidity exits quoted elsewhere due to some cases relating to members discharged in the previous financial year.

Table 40. New invalidity classifications by service in DFRDB in 2017–18

Army			Navy			Air Force
Class A	Class B	Class C	Class A	Class B	Class C	Class A	Class B	Class C
20	6	8	9	2	1	9	2	1

Note: This table shows the number of new invalidity retirement certificates issued, not the total number of invalidity pensioners.

Invalidity classification review

Periodic medical reviews of DFRDB invalidity recipients are no longer conducted. However, if an invalidity recipient believes their retiring impairment has deteriorated, they can initiate a review of their invalidity classification level. Recipients classified as Class C must make their reconsideration request within 30 days of when the initial classification was determined.

Complaints

Table 41. Complaints received in DFRDB

	2016-17	2017–18
Complaints received	21	25

All complaints are now resolved. Most complaints related to communication between CSC and the complainant, or to legislative changes to superannuation.

Changes to DFRB, DFRDB and DFSPB’s legislation and trust deed

The Marriage Amendment (Definition and Religious Freedoms) Act 2017 amends the legal definition of marriage and protects religious freedoms. Consequently, definitions within the Defence Force Retirement and Death Benefits Act 1973 were also amended, commencing 9 December 2017.

No changes were made to the Defence Forces Retirement Benefits Act 1948 or to the Defence Force (Superannuation) (Productivity Benefit) Determination 1998 in 2017–18.