UPDATE - ALL ARMS CALL FOR FIRE SUPPORT

30 Dec 09

If you've read the news you must guess exactly where this is heading...

The military appreciation process will tell you that you have to research the history to place yourselves in context and to understand how similar campaigns were fought and won (and often lost...)

Turn back the clock to just prior to the 2004 election when the Government decided that PSS (defined benefit) was too generous and decided to give public servants a harsh economic lesson with PSSAP (accumulation plan)

"As the 2004 election approached the then Government wanted to resolve the issue to avoid it becoming an election issue. CPSU worked with the minority party Senators and ALP to establish the Government contribution at 15.4 % (well above the Superannuation Guarantee level of 9 % which was the Government's preferred option). The Government agreed to this in order to get the legislation through the Senate. Given the outcome of the 2004 Senate election that gave the Liberal/National Government control, it was a significant outcome to achieve the 15.4 % contribution. ... PSS contributors could not be forced to move to the new scheme"

So what have we learnt so far ? One - that we now face considerable pressure from a broad political front to remove our "generous" superannuation benefits. I do not consider we are safe from any political party pro tem... and, two - that pre-election periods are fair game to turn things into a festering political sore to negotiate to our benefit

What it's all about is to remove the unfunded Government contributions that are part and parcel of defined benefits schemes but it fails to mention that these are largely covered by the Costello established Futures Fund thus there is a double savings to the Government and a double whammy to us...

I am of the opinion that we should join forces across a united front eg DFWA, SCOA, The RAR Association etc and engage the media and political parties in a united assault

There's far to many marginal seats with military members and superannuation pensioners for us to be ignored

It would be ironic if some who promised so much but have backpedalled frantically are caught up in the electoral upheaval (do I hear anyone say Mike KELLY ???)

I'll close by saying I am now of the opinion that the only way forward in the debate is to engage the political and media process in a deliberate assault

To not step up to the mark can only damage our beloved military and can only have us eating bread and dripping in our golden retirement years

Do not let this fall on deaf ears - do not let me down and make me have to tell you I told you so

IF YOU DON'T FIGHT YOU LOSE

Below is the lead-up to where we stand now...

FIRSTLY THE GOOD NEWS

DFRDB and MSBS will continue though it appears that MSBS will also be "closed" to new members with the introduction of a new military accumulation plan superannuation scheme

Just what is the proposed new military accumulation plan superannuation scheme is the burning question that I hear you asking...

Time to go to http://www.dfwa.org.au/ to do some research hmmm - it won't hurt you to read some of the other simmering issues on the boil as well - it's time you had something to say about the fair and reasonable indexation of existing MILSUPER pensions as well as the inequities of the taxation of existing MILSUPER pensions versus the married age pension... it's wrong to expect DFWA to fight for youse if you do not assist them...

I think we all know some of the older serving members who stayed with DFRDB and who consider they are far better off than MSBS members and we also sometimes hear about those who regret they were pressured into changing to MSBS

It comes as no surprise then that the proposed new military superannuation accumulation scheme plan is going to be yet another scheme with less benefits - or is it ?

How can this be so I hear you ask... but the contemporary history is a mass extinction of defined benefits plans and the substitution of accumulation plan superannuation schemes and the defining problem is what is better over the shorter or longer term

OK - but what is the difference in that they both attract the same employer contribution don't they...

Employer contributions remain the same and this is where the spin doctoring begins... but this is ALL that is paid... no more a multiple of your final average salary - no more generous indexed pensions like the existing MILSUPER arrangements - there's many other twists and turns in the spin doctoring but the simple fact is the very limited pension purchasing power of the proposed accumulation plan - in general terms roughly a third of MSBS

To put it in simple terms... if you were a member of an accumulation plan lately your fund would shrink with the current economic meltdown and you would be worse off than when you started... if you were a member of a defined benefit plan your salary still increases with your workplace agreements and your final benefit is a multiple of your increased final average salary and of course the existing defined benefits schemes have an extremely valuable pension component that CANNOT be overstated

There are said to be longer term benefits with an accumulation plan but this does not appear to help members who will retire in say the next 10 years and the fact that the economic downturn is still lingering together with advice from COMSUPER that very few transferred from PSS to PSSAP against a background of the Commonwealth's determination to abolish unfunded contributions suggests that any accumulation plan needs close scrutiny. The sticking point is the value of an indexed pension available from MSBS - you'd need nearly three times as much from an accumulation plan to purchase an equivalent (and often unindexed pension) and this is where accumulation schemes FAIL. Given that there appears to be an increasing percentage of older ARA members (perhaps due in part to the economic climate) it is more important than ever to protect the existing defined benefit pension arrangements

What it's all about is to slash if not eventually exterminate the unfunded Commonwealth contributions that are a part of a defined benfits scheme ie the growth in your salary by workplace agreements is reflected in your final entitlements but funding is not put aside for this and that is what Defence and the Commonwealth wish to shut down

In my view - there is an attempt to pull the wool over our eyes with some cold and calculated spin doctoring - don't be fooled by this or you will forever regret your failure to act NOW

AND NOW FOR THE NOT SO GOOD NEWS...

There are now at least four if not five superannuation schemes within Defence

We may have Defence civilians still with CSS and certainly many with PSS

A bit of googling will help you understand CSS and PSS

But PSS is now "closed" to new members and new Defence civilian employees MUST join PSSAP

What is PSSAP I hear you say - no surprise that it is an accumulation plan superannuation scheme paying (in my opinion) far less benefits and also subtly moving to make unfunded Government contributions extinct BUT it is the model by which Defence will say that this is the BENCHMARK for the civilian world and this is why the proposed new MILSUPER accumulation plan must be introduced

Don't be fooled by this - we have worked long and hard to achieve what we have gained with DFRDB and MSBS and this is reflected by the knowledge that we have a unique profession of arms and that the vagaries of service mean that we merit special consideration... more about this later

In the military we have DFRDB and MSBS and soon very likely the new accumulation plan mooted through Defence

So what, I hear you say... but I believe we cannot have five or will that be six superannuation schemes in Defence

Is it reasonable for five (or is that six) employees all being paid the same wage/salary to be paid more (and most likely less) superannuation benefits

For us as uniformed members, will it ultimately white-ant our ethos and will it undermine discipline and teamwork if there is an across the board realisation that DFRDB members are paid more than MSBS members who are paid more than the proposed new accumulation plan members - but once more the devil is in the details and all schemes need very close scrutiny to compare over the longer term. Once again I have to mention the failure of accumulation plan superannuation schemes in terms of their pension purchasing power and this is the sticking point that means we should NOT support the introduction of the proposed new accumulation plan in it's current format

I do not believe that we as uniformed members can support a system of haves and have nots

Either we are on the same team or we are not and I restate that I believe that it is UNHEALTHY for any organisation to allow a sliding scale system of benefits allowing castes of haves and have nots

But this cannot happen, I hear you say... but it certainly happened with the PSS/PSSAP transition... act now before it becomes too late

The potential savings to the Commonwealth are far too attractive if they can do away with unfunded employer contributions and save BILLIONS

I'm damned if I know how the Commonwealth Public Service unions allowed PSSAP to come into being without a HUGE shitfight but it reminds you that these things can and do happen and that PSSAP is now the model Defence will inflict on us saying that is what the contemporary world receives and thus so should uniformed members. Again you have to be careful of short-term vs longer-term but it is fair and reasonable to enter a debate where there may be some lingering doubts. Certainly the comments above about the value of indexed pensions under the current defined benefits plans is compelling enough in itself to show that we should actively fight to throw out the proposed accumulation plan arrangements

And what about recognition of the unique nature of military service I hear you say - surely everybody knows we must be rewarded for our unique profession of arms don't they...

Maybe not - I see little if any evidence that we are high achievers with our current superannuation arrangements which I say are only nearly on a par with PSS and that PSS in some ways has distinct advantages.... PSS allows higher employer contributions to match higher employee contributions when MSBS does not in the sense that employer contributions are linked to retention against a background of reports to Defence that many leave within five years and few serve over twenty years...

And yet I think I can dig through my emails and find one from the @#$ who states that in general terms we have excelled in terms of benefits against the outside world and this because of the uniqueness of our service...

But have we... I say NO... In my opinion MSBS is on a near par with PSS indeed I believe there are several shortfalls with MSBS

Its very damn difficult to find a profession similar to the military apart from the police and if you google around you'll find that the old Queensland Police defined benefit plan was far in excess of MSBS though I still have to see if this is still open to older currently serving members and I still have to research other States

In short - I believe there is a viewpoint that we as military members have NOT done as well as could be expected with MSBS and certainly we will be torpedoed and sank if the new proposed accumulation plan is forced upon new recruits without any larger debate on the pros and cons of both types of scheme as well as a larger debate about how we compare with other contemporary schemes

I'd love to say more - there are a swathe of other issues that I will have to address sooner or later but above are the priorities in my opinion - whoah - I can't help myself and have to mention that whilst my GRES service counts towards my Defence Long service Medal and my long service leave when I transferred to the ARA - my GRES service doesn't count towards the increasing MSBS employer contributions of 23% and 28% - yet another inequity that Defence is seemingly obliged to fix but...

It never ceases to surprise me how so many other serving members are vehemently disagreeing with other MILSUPER regulations - more another day but you know you just have to ask around...

I do need you to understand the history so you can place yourself in the correct context - its only by understanding the history that you can understand that the future may be grim

If you do not not take the opportunity to lobby for change you will only damage the military (in my opinion)

Over to youse but refer this website to ALL your colleagues and lobby through your chain of command or the Defence Force Welfare Association (DFWA) or similar

I dislike to recommend any organisation but consider that DFWA is taking a vanguard role with this

IF YOU DON'T FIGHT YOU LOSE

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Last modified: 06/06/10