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Thursday, 26 September 2002
Page: 5079


Senator Sherry asked the Minister for Defence, upon notice, on 30 August 2002:

(1) For each department within the Minister's portfolio, how is superannuation calculated (ie. is the superannuation entitlement calculated on base salary and other income payments, such as overtime allowance or performance bonuses, or base salary alone).

(2) If the department calculates superannuation on a broader basis, by incorporating all income payments in the calculation of superannuation entitlements, but allows employees to opt out of this arrangement so as to reduce the base upon which superannuation is calculated, what proportion of employees do this.


Senator Hill (Minister for Defence) —The answer to the honourable senator's question is as follows:

(1) For members of the Commonwealth Superannuation Scheme (CSS) and the Public Sector Superannuation (PSS) scheme their superannuation entitlements are calculated in accordance with the rules of those schemes. The schemes are the portfolio responsibility of the Minister for Finance and Administration.

For non-ongoing employees who are not eligible to be members of the CSS or PSS, a superannuation guarantee contribution is paid into the superannuation scheme of their choice and their superannuation entitlement is calculated in accordance with the rules of that scheme.

Members of the Australian Defence Force belong to either the closed Defence Force Retirement and Death Benefits (DFRDB) scheme or the Military Superannuation and Benefits Scheme (MSBS).

Retirement pay for an eligible DFRDB member is calculated as a percentage of their annual rate of pay. Annual rate of pay is defined to be the highest increment for the rank held by the member plus service allowance.

For an MSBS member their scheme benefit is a member benefit and an employer benefit. The member benefit is the member's own contributions and earnings. The employer benefit is calculated on the final average salary times a multiple based on length of service. For the purpose of the final average salary, salary is defined as the member's rate of salary (over the last 1095 days, taken as if the member had been on full pay) plus service allowance and higher duties allowance.

(2) There is no discretion to vary the basis of calculation.