About the DFRB and DFRDB Schemes
Description of the Schemes
The Defence Forces Retirement Benefits Scheme (DFRB), established in 1948 by the Defence Forces Retirement Benefits Act 1948 (the DFRB Act), was closed to new contributors from 30 September 1972. It continues to provide for the benefit entitlements of those Members who ceased to be contributors before 1 October 1972 and for reversionary benefits to their spouses.
The Defence Force Retirement and Death Benefits Scheme (DFRDB Scheme) was established by the Defence Force Retirement and Death Benefits Act 1973 (the DFRDB Act) and came into operation with effect from 1 October 1972. The DFRDB Scheme provides occupational superannuation for Australian Defence Force (ADF) Members who became contributors on or after 1 October 1972, and for Members who were contributors to the DFRB Scheme on 30 September 1972 and were compulsorily transferred to the DFRDB Scheme on 1 October 1972.
The DFRDB Scheme is an unfunded defined benefit superannuation scheme. There is no investment fund for the DFRDB Scheme and all benefits are paid from the Governments’ Consolidated Revenue Fund. With the commencement of the Military Superannuation and Benefits Scheme (MilitarySuper) on 1 October 1991, the DFRDB Scheme was closed to all new entrants. Members of the DFRDB Scheme were given the choice to remain in the scheme or to transfer to MilitarySuper. All new ADF Members since 30 September 1991 have automatically become Members of MilitarySuper, with the exception of former ADF Members in receipt of a DFRDB Scheme benefit who, on re-entry to the ADF, chose to rejoin the DFRDB Scheme.
Members of DFRDB Scheme contribute at the rate of 5.5% of highest incremental salary for rank plus Service Allowance. Contributions are paid directly to the Consolidated Revenue Fund every fortnight. Other than in respect of Members who make optional ancillary contributions to MilitarySuper, benefits payable are not dependent on the earnings of an investment fund.
Apart from the case of the separate 3% Productivity and Superannuation Guarantee arrangements, Members have no entitlement to an employer element if they resign before completing twenty years service. Unlike most other defined benefit superannuation schemes, age at retirement plays only an incidental part in calculating benefit entitlements; the main factor is the length of the Member’s effective service. Members who retire from the ADF after twenty years of effective service (or after fifteen years service at retirement age for rank) are entitled to a pension, based on a percentage of their annual pay on retirement. Members who are retired from the ADF on invalidity grounds may be entitled to a pension. Benefits are also payable to the surviving eligible spouse and children on the death of a Member or pensioner.
Members with less than twenty years service or who have not reached their compulsory retiring age for rank are entitled to a refund of contributions, a Superannuation Guarantee amount, a productivity benefit separately funded by the Department of Defence and, if applicable, an unfunded gratuity based on completed years of service.
the DFRDB Authority
The DFRDB Authority is responsible for the general administration of the DFRB Act and the DFRDB Act, subject to the direction of the Minister for Defence Personnel, Materiel and Science.
The Authority is established by section 8 of the DFRDB Act. The Commissioner for Superannuation is ex-officio Chairman of the Authority, in accordance with paragraph 8(2)(a) of the DFRDB Act.
There are four other Authority Members, all of whom are appointed by the Minister. These members are appointed for two years, in accordance with subsections 8(3) and 8(5) of the DFRDB Act, and may be re-appointed at the end of their term.
The Authority is provided with administrative support by the staff of ComSuper, who assist the Commissioner for Superannuation in performing his functions as Chairman of the DFRDB Authority. ComSuper is responsible for the day-to-day administration of the DFRB and DFRDB Schemes, as well as other superannuation schemes for ADF and Commonwealth employees.
The administration of MilitarySuper is covered separately in the Military Superannuation and Benefits Board of Trustees No. 1 Annual Report 2008–09. Information about ComSuper’s operations can be found in the Commissioner for Superannuation Annual Report 2008–09.
Members of the Authority at 30 June 2009 were:
Mr Leo Bator, ex-officio Chairman and Commissioner for Superannuation
Mr Brian Paule, Deputy Chairman (re-appointed from 15 February 2008)
Captain Jay Bannister, RAN, Nominee of the Chief of Navy (appointed from 15 February 2008)
COL Scott Hicks, Nominee of the Chief of Army (appointed 19 April 2008)
GPCAPT David Richardson, Nominee of the Chief of Air Force (re-appointed 20 July 2008)
Standing from left:
CAPT Jay Bannister RAN,
SQNLDR Andre Bobets (deputy
to GPCAPT Richardson),
COL Scott Hicks
Seated from left:
Mr Leo Bator,
Mr Brian Paule