Opinion – Vets’ super pain as MPs cash up

May 19, 2016

MILITARY pensioners who can afford such luxuries as daily newspapers may have read reports detailing retiring federal MPs’ superannuation payments.

One report suggested more than 30 Coalition MPs are entitled to indexed annual pensions starting around $200,000.

Nice work if you can get it and of course those supporting such largesse will argue they have earned it.

Short, intense, stressful careers with insecure tenure, long irregular hours, extended family absences, foregoing more lucrative alternative private sector employment opportunities for selfless public service, etc … you get the drift.

You certainly get the drift if you served in the ADF because the same descriptions can be applied to military service with the added negatives of possible death or permanent disability either in training or on operations.

The same report suggested these generous political entitlements were thanks to former prime minister John Howard’s “loathing” of retrospective changes to superannuation.

Mr Howard introduced the changes responding to public pressure over generous parliamentary pensions but refused to make them retrospective.

Those DFRDB military superannuants who struggle to survive on their meagre pittance must find that somewhat ironic, given the multiple, always retrospective, changes that scheme has endured since its inception.

Nor can they forget it was compulsory with a 5 per cent levy on salary, with no employer contributions and a minimum 20-year service period before members could draw a pension.
 It was intended, they were told, to enable them to transition from military service at a relatively young age with a modicum of financial security.

It was to be indexed to maintain its purchasing power.

Members were able to commute a portion of future entitlements calculated at value on separation to be repaid with a reduced fortnightly pension calculated on life expectancy estimated at age 72.

On death, widows and dependent children would receive a reduced pension which was not to have been penalised by any commutation payment to the contributor.

The scheme was also self-funding until politicians decided it would be better rolled into later schemes designed for public servants employed under entirely different conditions.

It has been subject to different, lesser indexation assessments than other pensions such that its purchasing power has been considerably diminished over time.

Those superannuants who reach then pass the old life expectancy continue on a reduced pension although they have more than repaid their original commuted element.

To make matters worse widows’ DFRDB pensions are calculated on the reduced rate whether their spouse commuted or not.

As politicians push their snouts into parliamentary superannuation troughs, pleas by DFRDB superannuants simply for a fair hearing continue to fall on deaf ears while they struggle to survive on one tenth of the pensions paid to many politicians for far less service.