DFRB, DFRDB and DFSPB: Defence Forces Retirement Benefits, Defence Force Retirement & Death Benefits, Defence Force (Superannuation) (Productivity Benefit)
Overview of DFRB
DFRB is a closed military scheme with no contributing customers. Established in 1948 by the DFRB Act, this scheme closed to new contributors on 30 September 1972. Contributing customers at that time automatically transferred to DFRDB on 1 October 1972. DFRB continues to provide the benefit entitlements for customers who ceased to be contributors before 1 October 1972, and for reversionary benefits to eligible spouses and children.
Overview of DFRDB
DFRDB is also a closed military defined benefit scheme. Established by the DFRDB Act, the scheme closed to new ADF entrants from 1 October 1991, when MilitarySuper was established. DFRDB provides superannuation for ADF members who became contributors on or after 1 October 1972, and for contributors of DFRB on 30 September 1972, who compulsorily transferred to DFRDB on 1 October 1972.
Overview of DFSPB
DFRDB customers are also entitled to a productivity benefit under the Defence Force (Superannuation) (Productivity Benefit) Determination (DFSPB), issued under the Defence Act 1903. It is paid by the Department of Defence when a customer’s DFRDB benefits are paid.
Figure 28. Number of DFRB pensioners over five years
Note: Figures are at 30 June of each year. ‘Pensioners’ represents the number of pension accounts, not the exact number of pensions (e.g. multiple recipients such as a spouse and orphan children may be paid under one account).
Figure 29. Number of DFRDB customers over five years
Note: Figures are at 30 June of each year. ‘Pensioners’ represents the number of pension accounts, not the exact number of pensions (e.g. multiple recipients such as a spouse and orphan children may be paid under one account); pensioners who re-enter for less than 12 months do not contribute to DFRDB, continue to receive a pension and are not eligible for invalidity; pensioners who re-enter for more than 12 months become contributors, their pension is suspended and they are eligible for invalidity.
DFRDB customers must contribute 5.5% of their fortnightly super salary until they reach 40 years of effective service, at which time they can no longer contribute. Contributors can also make voluntary payments into MilitarySuper, known as ancillary contributions (refer to the MilitarySuper section for details).
Figure 30. DFRDB contributions over five years
DFRDB benefit payments
Lump sum payments
DFRDB customers ceasing a period of ADF service can commute part of their DFRDB retirement pay to receive an upfront lump sum payment (commutation amount). If a customer chooses to commute, their retirement pay is permanently reduced irrespective of how long they live. Retiring customers can elect to commute up to a maximum of five times the value of their annual pension.
Figure 31. DFRDB lump sum payments over five years
DFRDB provides invalidity and death benefits. If a customer is medically transitioned from the ADF, invalidity benefits may be available. There are three levels of invalidity benefit classifications:
Class A: Significant incapacity
Class B: Moderate incapacity
Class C: Low incapacity (no entitlement to an invalidity pension)
Table 43. Invalidity classifications in DFRDB
Note: These figures may vary slightly to invalidity exits quoted elsewhere due to some cases relating to customers discharged in the previous financial year.
Table 44. Invalidity pension classifications in DFRDB
Invalidity classification review
Periodic medical reviews of DFRDB invalidity recipients are no longer conducted. However, if an invalidity recipient believes their retiring impairment has deteriorated, they can initiate a review of their invalidity classification level. Recipients originally classified as Class C must make their reconsideration request within 30 days of the initial classification decision.
Complaints from DFRDB customers
There was a slight increase in complaints from DFRDB customers in 2019–20, with the major topics being commutation, family law, benefit payments and beneficiaries.
Table 45. Complaints received in DFRDB
Changes to DFRB, DFRDB and DFSPB’s legislation and Trust Deed
No changes were made to the DFRDB Act and the DFRB Act in 2019–20.