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Thursday, 13 April 1961

Mr HAROLD HOLT (Higgins) (Treasurer) . - by leave - I move -

That the bill be now read a second time.

The bill which I now introduce proposes several amendments to the Defence Forces Retirement Benefits Act 1959 which provided a comprehensive revision of the retiring benefits for members of the defence forces. Honorable members will recall that in 1957 the Government decided to establish a committee under the chairmanship of Sir John Allison to review the pay and retirement benefit conditions of members of the services. The act, which commenced on 14th December, 1959, provided new rates of pensions and other retiring benefits which were substantially in excess of the benefits previously payable. The act provided also, for amended rates of contributions for the increased benefits. It was necessary to make special provisions to cover members of the forces who were serving at the date of commencement of the act and who had been contributing for the previous benefits.

Two of the proposed amendments provide a further period of time within which members may exercise a right of election granted by the 1959 act, and a third amendment deals with the gratuity entitlement of a limited number of serving officers. These three amendments have been recommended by the Defence Forces Retirement Benefits Board and the remaining amendments are the product of experience in the administration of the act.

Members of the defence forces who were contributing to the Defence Forces Retirement Benefits Fund at the date of commencement of that act could elect within four months not to contribute for all or part of the additional pension provided by the act. A number of members made an election but had second thoughts and requested approval to withdraw that election and to contribute for an increased pension. This bill grants a further period of two months during which members who elected not to contribute for all or part of the additional pension may revoke that election and become contributors for additional pension.

The 1959 act also provides that a member who had elected in 1948 not to become a contributor to the fund may revoke that election and elect to become a contributor for full benefits as from 2nd July, 1948. Under the act, such a revocation and election had to be made before 14th April, 1960, but because of the large number of men involved it was not possible to complete all administrative action by that date. The bill extends to 1st August, 1960, the period during which an election may be made and will thus permit the Defence Forces Retirement Benefits Board to deal with elections received up to that date.

The bill also preserves the rate of gratuity payable on retirement to officers who were serving at 14th December, 1959. Previously, the entitlement was at the rate of one and one-half times the amount of their contributions, and the 1959 act provides gratuity at a fixed amount for each year of service. This fixed amount proved, in some cases, to be less than the previous entitlement and this bill will continue, in those cases, the one and one-half times formula in respect of contributions being paid at 13th December, 1959. It also provides, for officers who were serving as other rank members on 14th December, 1959, the continuation of the one and onehalf times formula in respect of their service in the ranks if the formula provides a greater benefit than the fixed amount.

A member who is prematurely retired and who is contributing for additional pension for his rank at 14th December, 1959, will not have paid to the fund sufficient to pay for his share of the additional pension. In these circumstances, the 1959 act provides for a lesser pension, or full entitlement on payment of a lump sum. The bill applies this provision to a member who is contributing for additional widow's pension or for the additional pension due as a result of a promotion.

The 1959 act provides that the reduced pension and the lump sum payment shall be determined by the board on the advice of the Commonwealth Actuary, and that the board in making a determination and the Commonwealth Actuary in advising the board shall have regard to certain factors. Since it is the Actuary who makes the calculation, the bill provides that he only shall have regard to these factors.

Other provisions of the bill are minor drafting amendments or are consequential to the provisions I have outlined. I commend the bill to honorable members.

Debate (on motion by Mr. Haylen) adjourned.

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