If you’re medically separated from the ADF, you may be eligible for invalidity benefits. When you die, your eligible spouse and eligible children will get death benefits.
Member and ancillary benefits
Employer benefit
When you’re 55 or older
You must have reached preservation age and be retired from the workforce if you want to take the employer benefit (or a portion of it) as a cash lump sum. If you’re younger than preservation age or still working, you’ll need to roll it over into a choice super fund.
When you’re under 55
How your pension is calculated
Before making any decisions about your super, you should seek independent financial advice.
Rose is 43 years old and leaving the Permanent Forces after 25 years and 189 days of service. On her last day of service, her FAS is $178,576.
To figure out her total employer benefit, we first need to calculate her Employer Multiple (EM).
To do this, break down Rose’s years of service and apply the correct contribution rate to each range:
7 × 18% = 1.26
13 × 23% = 2.99
5 × 28% = 1.4
(189 ÷ 365.25) × 28% = 0.14488706
Add them together to get the EM:
EM = 5.79488706
The EM is then multiplied by the FAS at the date of exit to calculate the employer benefit:
(EM × FAS = Employer Benefit)
5.79488706 × $178,576 = $1,034,827.75
So, when Rose leaves the ADF, she will have:
- an employer benefit of $1,034, 827.75 preserved in MSBS
- a member benefit she can leave preserved in MSBS or roll over into a choice super fund
- an ancillary benefit she can leave preserved in MSBS or roll over into a choice super fund.
If Rose gets a new job when she leaves the ADF, she’ll start building superannuation in a fund of her choice. When she turns 55, she can claim her pension from her employer benefit, even if she’s still working in a civilian job.
Stuart is 55 years old and leaving the Permanent Forces after 31 years and 236 days of service. On the last day of his service, his FAS is $205,056.
To calculate his EM:
7 × 18% = 1.26
13 × 23% = 2.99
11 × 28% = 3.08
(236 ÷ 365.25) × 28% = 0.18091718
Add them together to get the EM:
EM = 7.51091718
Calculate the employer benefit:
(EM × FAS = Employer Benefit)
7.51091718 × $205,056 = $1,540,158.63
As Stuart's 55, he's entitled to convert his employer benefit to a lifetime pension. To do this, we use the pension conversion factor for his age, which is 12:
(Employer benefit ÷ pension conversion factor = annual pension amount)
$1,540,158.63 ÷ 12 = $128,346.55 a year before tax
So, when Stuart leaves the ADF, he will have:
- an annual pension of $128,346.55 (before tax), paid fortnightly
- a member benefit he can leave preserved in MSBS or roll over into a choice super fund
- an ancillary benefit he can leave preserved in MSBS or roll over into a choice super fund.
If Stuart gets a new job when he leaves the ADF, he’ll start building superannuation in a fund of his choice. He can still get his MSBS pension while working in a civilian job.
Stuart can access his member and ancillary benefits as cash lump sums when he’s reached his preservation age and retired from the civilian workforce.
