Notional retiring age
Retiring before reaching notional retiring age?
You are entitled to retirement pay, even if you retire before you reach your notional retiring age (NRA) for rank, as long as you have completed 20 years of effective service. However, if you do so, your retirement pay will be reduced by 3% for every year that your actual retiring age is less than your NRA. The example on the next page shows you how a NRA reduction is applied.
The NRA provisions of the DFRDB Act exist to encourage officers to serve until they reach a certain age. This age varies according to the rank that officers hold at the time they retire. The notional retiring ages for the different ranks of officers are outlined below in Table 4.Top
| Rank | Notional retiring age (years) | ||
| Navy | Army | Air Force | |
Admiral Vice Admiral |
General Lieutenant General |
Air Chief Marshal Air Marshal |
55 |
| Rear Admiral | Major General | Air Vice Marshal | 52 |
Commodore Captain |
Brigadier Colonel |
Air Commodore Group Captain Group Officer |
50 |
Commander Chief Officer (WRANS) Matron (RANNS) Superintendant (Naval Police) |
Lieutenant Colonel | Wing Commander Wing Officer |
45 |
| Lower rank | Lower rank | Lower rank | 42 |
Notional retiring age only applies to officers who retire at their own request or are retired on disciplinary grounds. However, notional retiring age does not apply to officers who are either:
- made redundant or
- discharged medically unfit for further service or
- on a short service commission, and complete that commission.
Example C: Calculation of retirement pay with notional retiring age penalty
Paul, aged 40, is a Captain retiring from the Defence Force after 20 years’ service. As the notional retiring age for a Captain is 42 (see Table 4 on page 17), Paul’s retirement benefit will be reduced by 6%, which is a 3% reduction for each year that his age at retirement is less than the notional retiring age for his rank.
Step 1. $70 935 × 35% = $24,827.25
In this step, Paul’s final salary for superannuation purposes is multiplied by the applicable percentage for his years of effective service as shown in Table 2 (20 years’ service = 35%
of final salary).
Step 2. $24 827.25 × 6% = $1,489.64
Because Paul is retiring two years before the notional retiring age for his rank, a penalty of 6% is applied to the amount worked out in the first step.
Step 3. $24 827.25 – $1,489.64 = $23,337.61
In this step, the notional retiring age provisions are applied by subtracting the penalty resulting from Step 2 from the amount worked out in Step 1.
In this example, Paul’s annual retirement pay is $23 337.61, before commutation and before tax. Should he elect to commute a portion of his retirement pay to a lump sum, the steps are exactly the same as shown from the second step in Example B in the 'Commutation' section.Top
DFRDB Retirement benefits - quick guide
