Explanatory Memorandum
(Circulated by the authority of the Treasurer, the Hon John Dawkins, M.P.)Defence Act 1903
Summary of proposed amendments
The amendments will ensure that the superannuation guarantee requirements are met for members of the Defence Force.
This will be achieved by amendment of section 52 of the Defence Act 1903 to enable the necessary payments to be made under the Determination that provides for the current 3% interim superannuation benefit.
Explanation of proposed amendments
Currently members of the Defence Force who serve for 12 months or more belong to either of two superannuation schemes - the Defence Force Retirement and Death Benefits (DFRDB) Scheme or the Military Superannuation and Benefits Scheme (MSBS). Some members who are serving on continuous full time service for less than 12 months have the option of joining MSBS.
The DFRDB Scheme meets the superannuation guarantee requirements where members have more than 20 years service. Generally, where members retire with less than 20 years service, the only employer contribution is the 3% interim superannuation benefit. The amendment will enable this to be topped up to be consistent with the superannuation guarantee requirements.
The MSBS meets the superannuation guarantee requirements for members who serve for seven or more years. For those who serve for less than seven years the MSBS Rules contained in the MSBS Trust Deed will be amended to ensure compliance.
Commencement date
The amendments to the Defence Act 1903 apply from 1 July 1992.