Editor's Choice
Aware Super hires head of corporate development
The $175 billion superannuation fund welcomed its first head of corporate development as it looks to be a "merger partner of choice" in the industry.
Link Group rebrands as acquisition completes
Link Group announced its new name ahead of delisting from the ASX at today's market close.
Crescent Capital sells down ClearView stake
ClearView has been alerted that Crescent Capital wishes to sell a major share in the company.
Social media influencers charged for promoting shady investments
Reality TV stars from shows like Love Island, Geordie Shore, and The Only Way Is Essex are due to face Court for pushing unauthorised investment schemes on their followers.
Products
Featured Profile
Matt Gaden
HEAD OF AUSTRALIA
JANUS HENDERSON INVESTORS (AUSTRALIA) LIMITED
JANUS HENDERSON INVESTORS (AUSTRALIA) LIMITED
Helping investors traverse financial markets and build their wealth during the peaks and troughs is Janus Henderson Investors head of Australia Matt Gaden's game plan. He tells Karren Vergara why in this long game of investing, active management wins.
ADF members considering switching to the new scheme should definitely consider their options carefully.
While this article mentions the contribution rate to the scheme which will be close to that of existing schemes, it doesn't mention that MSBS members who choose to take their employer benefit on retirement as a pension are able to do so on terms that are generous when compared equivalent rates available on the open market (eg, from annuities).
The public sector scheme that offered the same pension conversion factors was closed to new members from 30 June 2005, so to have the opportunity to join this one for an extra 10 years to 30 June 2015 has been quite the opportunity!
Unless you're an ADF member and have reached your Maximum Benefit Limit (and currently receive just 3% Employer Contribution), or have been in the ADF for less than five years, there really is no incentive for the serving member, receiving 23% or 28% Employer Contribution, to make the switch from MSBS to the new super scheme - ADF Super.
The lack of incentives to switch form MSBS to ADF Super is in stark contrast to when MSBS was introduced, in 1991/92, to lure people away from DFRDB and provide improvements for those (most) people who didn't complete 20 years service, and thus qualify for a military pension.
An MBL member who switches over will see their Employer Contribution Rate increase from 3% to 15%. That's a good incentive.
An ADF member with 5 years of service under their belt now, will be receiving 23% Employer Contribution Rate by the time ADF Super kicks off in July 2016. These folks have some some sums to do. "Should I stay with high, uninvested employer contributions or, opt to go with 15.4% of my salary (and superannuable allowances), that are actively invested?"
The introduction of MSBS came with two significant incentives:
1. The MSBS Retention Benefit. (No longer available).
2. 'Generous' transition arrangements. (Your balance in DFRDB was multiplied by a factor and transferred into. The MSBS Fund).
The Government claims that the closure of MSBS will save $126 billion by 2050.
I wonder how much more could be saved if there was some innovation with the new scheme to compel thousands more ADF members to make the switch?
It would seem the Government has missed an opportunity to virtually rid itself of future unfunded liabilities for the MSBS scheme.