AUSTRALIA - A multi-billion dollar overhaul of Australia's military defined benefit (DB) superannuation scheme is needed in order to contribute towards recruitment and retention of personnel, an independent review has found.
It said the current military scheme fell "well short of best practice superannuation" and recommended the introduction of a fully funded and taxed accumulation plan for retirement and separate defined benefits for death and disability. It said the scheme should start in the first half of the calendar year of 2009.
The report was commissioned by former prime minister John Howard, but only released last month by the new Labor government.
Warren Snowden, minister for defence science and personnel, was non-committal about the report's findings, instead opening a consultation period which will conclude on 31 March.
He said: "The Rudd government will provide further opportunity for public comment about the review's findings and recommendations and will consider its attitude to the report after the consultation period."
The military superannuation scheme is one of only three government DB schemes which remain in Australia - the others being for the police and judges.
David Harris, managing director of Tor Financial Consulting, who previously worked in government agencies in Canberra, said it would be interesting to see the new government's approach to the issue.
He said the defence department faced a challenge in that it needed to provide retirement benefits to military personnel earlier, because of the nature of the job, against a backdrop of people living longer.
He said: "People are living longer and draining that resource, and the unfunded liabilities still continue on. It is early days, but it has to be addressed in some way."
Harris said the Future Fund was in place to address unfunded liabilities in public service schemes, but there were many more schemes facing such a situation than just the military. He warned: "I think we cannot look at the Future Fund as being the panacea for everything."
The Pensions Regulator (TPR) has granted 11 master trusts extensions to apply for authorisation, as it confirms it has received 22 applications ahead of the 31 March deadline.
Aegon Master Trust, Fidelity Master Trust and Ensign have sent off their authorisation applications to The Pensions Regulator (TPR).
Self-administered pension funds spent £15bn on payments to pensioners in Q4 2018, but received just £12bn in contributions (net of refunds), Office for National Statistics (ONS) data reveals.
Aberdeen Standard Investments (ASI) and Gresham House are to team up to form a joint venture.