Federal Member for Canberra, Gai Brodtmann MP, has welcomed yesterday’s announcement by the Minister for Defence Materiel Dr Mike Kelly on fairer indexing of military superannuation.
From July 2014, the Defence Forces Retirement Benefit and the Defence Force Retirement and Death Benefit will be indexed to whichever is the higher of the CPI or the Pensioner and Beneficiary Living Cost Index. Currently, these schemes are both indexed by CPI.
Both of the schemes covered under yesterday’s announcement are defined benefit schemes, which currently pay a percentage of the final wage as a pension, indexed twice yearly according to the CPI. The DFRB scheme closed in 1972 and the DFRDB in 1991.
The announcement will benefit approximately 26,700 superannuants aged 65 and over.
“While yesterday’s announcement is a great first step, the Commonwealth superannuation pension remains an area where there is room for further reform,” Ms Brodtmann said.
“I will continue to advocate for these former Commonwealth employees, and continue to work to ensure all Australians have financial security in their retirement.”
The Commonwealth superannuation pension is currently indexed using only CPI.