Planning guide

This guide has been prepared to highlight superannuation issues for Members of the DFRDB scheme. The guide should not be used for other superannuation schemes. It is not intended to give advice that is specific to your particular financial circumstances. You should seek professional financial planning advice whenever in doubt.

Please note that whilst the DFRDB scheme entitles Members to receive retirement pay after twenty years of service in the ADF, for some Members this may not provide sufficient income to fund permanent retirement from the workforce.

Graph comparing members age to years of service

Text version of planning guide chart

How to Use this guide

Step 1: Look at the groups on the chart that are around your present age and years of service. Consider which groups are relevant to your situation.
Step 2: Read the notes for the groups around where you are now. Then read the notes for later groups in the following order:
- Stream 1 - groups A, B, C, D, E and F
- Stream 2 - groups G, H and I
- Stream 3 - groups J and K
Step 3: Use the i-Estimator to project your potential retirement benefits. Consider your choices carefully. Repeat this at least once a year. Seek financial planning advice from a qualified practitioner whenever in doubt.

How Much Will I Need in Retirement?

Financial needs in retirement vary greatly. The Association of Superannuation Funds of Australia (ASFA) provides detailed budgets of what singles and couples would need to have to be able to have either a modest or a comfortable retirement lifestyle.

Retirement pay as a percentage of annual salary
Years of service	Percentage
20	35.00
21	36.50
22	38.00
23	39.50
24	41.00
25	42.50
26	44.00
27	45.75
28	47.50
29	49.25
30	51.25
31	53.25
32	55.50
33	57.75
34	60.25
35	62.75
36	65.75
37	67.75
38	70.50
39	73.50
40 (or more)	76.50

GROUP A

DFRDB Members in this group are typically young and are not yet entitled to retirement pay. Members in this position who choose to stay with the ADF until retirement age (i.e. until 55) will be entitled to retirement pay at the higher levels the scheme offers for their rank. See the notes for groups B, C, D, E and F for further information on this.

Group A Members who decide to pursue a career other than the ADF will need to provide for retirement entirely from other sources. Being still young they have enough time to provide adequately for retirement but need to make sure it is covered wherever they go.

Group A Members who resign now without electing for the preservation option will receive a refund of their own contributions. They will also have a small productivity benefit that must be rolled over until retirement. They will not be able to re-enter the DFRDB if they subsequently rejoin the ADF – although they would be able to join the MSBS.

As DFRDB has been a closed scheme for many years, very few members fall into this category.

GROUP B

Members in this group are typically not yet entitled to retirement pay but are probably getting close to that point.
Group B members who leave the scheme now would be in a similar position to those in group A except that:

by resigning without electing for preservation they will lose the chance for a valuable DFRDB retirement pay benefit; and
being a little older than those in group A they will have less time to make up for this.

Group B Members who stay with the DFRDB until retirement age will be entitled to receive retirement pay at the higher levels provided by the scheme for their rank.

GROUP C

Although still relatively young, Group C members typically have already qualified for DFRDB retirement pay. Your current retirement pay options, if any, are shown on the back of your member statement.

Like everyone else in this stream Group C members who stay in the ADF until retirement age will be entitled to receive DFRDB benefits at the higher end of those available for their rank. Group C Members are possibly looking carefully at career options. Transition seminars are available to help them with this.

A Group C Member who chooses a career other than in the ADF may need to consider providing for additional superannuation savings to supplement their current entitlement. It is unlikely that the current entitlement of a Group C member, on its own, will be enough to fund eventual retirement from the workforce.

Although Group C Members will probably need to continue saving for retirement there is a limit to that need. If their income is high and likely to be in the future they might also consider seeking advice on taxation aspects of their superannuation benefits.

GROUP D

Depending on lifestyle it is possible that members in this group may have a current retirement pay entitlement that is enough to support permanent retirement from the workforce. Note that higher rates of tax are payable on a commutation lump sum taken before age 55 than one taken after age 55 although such payments can be rolled over to defer the tax liability.

Members can use the i-Estimator to have a closer look at this.

Members in Group D who intend to stay with the ADF until retirement age and are on a high salary might also consider seeking advice on taxation of potential benefits.

GROUP E

Members in this group are typically already on track for receiving retirement pay at the higher end of those available from the scheme for their rank. Tax planning may be an issue for them.

Approaching retirement age Group E Members might consider attending a transition seminar and will probably be looking at lifestyle issues in retirement at this stage of their planning.

Other suggestions for Group E Members are:

within 12 months of intended retirement ring ComSuper on 1300 001 677 and ask for a benefit estimate. Consider the taxation implications of retiring before or after age 55. Seek professional advice if in doubt.
have a look at the fact sheet such as the one called About to Leave the ADF? This is a guide to all the details of applying for a benefit and many other things that go with retirement.

GROUP F

As long serving Members of the ADF and the DFRDB, Group F Members are entitled to high levels of retirement pay for their rank.
Form D20 Application for Retirement Pay, Commutation & Superannuation Productivity is used to apply for a benefit.

Other matters for Group F Members to consider are:

for taxation reasons, a commutation election should be made within six months of retirement;
there are publications on the web site concerning taxation of lump sum benefits and tax concessions for deductible amounts which discuss the choices that can be made about tax concessions;
when retired make sure to keep ComSuper informed of current address. There is a regular newsletter with the six monthly CPI updates to retirement pay in January and July each year.

GROUP G

Group G Members are typically approaching middle age but not yet entitled to retirement pay.

Members in this group who leave the scheme now and do not elect for preservation you will lose the chance for DFRDB retirement pay and may find it difficult to save enough elsewhere to provide for retirement.

Those who stay with the DFRDB until retirement age will receive retirement pay at a level above the minimum provided by the scheme.

We strongly suggest that group G Members check their i-Estimator projections. Those who find that their likely eventual retirement pay is not adequate for their lifestyle needs might consider providing for additional superannuation savings and/or investments. Remember that the earlier a start is made on saving the more likely it is that goals will be achieved.

GROUP H

Group H Members have a current entitlement to retirement pay. They can improve on that position by serving through to age 55. The i-Estimator should be used to check benefit projections.

For many people in Group H the projected benefit is likely to be adequate for retirement needs. Where that is not the case, Group H Members might consider how to use existing financial resources to generate an additional income stream in retirement.

Group H Members might also consider the taxation implications of retiring before or after age 55. Note that commutation does result in reduced retirement pay. Seek professional advice if in doubt.

Within 12 months of intended retirement Members should ring ComSuper on 1300 001 677 and ask for a benefit estimate.

GROUP I

Group I Members have reached age 55 with an entitlement to retirement pay.

Form D20 Application for Retirement Pay, Commutation & Superannuation Productivity is used to apply for a benefit.

Other matters for Group I Members to consider are:

for taxation reasons, a commutation election should be made within six months of retirement;
there are publications on the website concerning taxation of lump sum benefits and tax concessions for deductible amounts which discuss the choices that can be made about tax concessions;
when retired make sure to keep ComSuper informed of current address. There is a regular newsletter with the six monthly CPI updates to retirement pay in January and July each year.

GROUP J

To qualify for retirement pay from the DFRDB Group J Members may need to serve beyond age 55, which probably involves speaking to someone about it sooner rather than later.

Even after 55 the eventual retirement benefit will be relatively modest. Group J Members probably will need to supplement it from other sources.

As DFRDB has been a closed scheme for many years, very few members fall into this category.

GROUP K

Group K Members have reached retirement age with a retirement pay entitlement that is at the lower levels the scheme offers. Group K Members may need to seek professional planning assistance to ensure they are well provided for in retirement.

Form D20 Application for Retirement Pay, Commutation & Superannuation Productivity is used to apply for a benefit.

Note that, for taxation reasons, a commutation election should be made within six months of retirement.
Forms and Fact Sheets

As DFRDB has been a closed scheme for many years, very few members fall into this category.

D20 Application for Retirement Pay, Commutation & Superannuation Productivity

PDFs can be viewed and printed using the FREE Adobe Acrobat Reader.