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Public servants hopeful after military pension victory

Retired public servant Ian Hooley at home in Gordon.

Retired public servant Ian Hooley at home in Gordon. Photo: Rohan Thomson

Retired public servants have been encouraged by the victory of tens of thousands of military pensioners who will now have their benefits indexed in line with the age pension and not solely against inflation.

John Coleman, federal president of the Superannuated Commonwealth Officers' Association, said his organisation had been campaigning on fair indexation for its members for years.

''The Coalition has now acknowledged the CPI is an inadequate way to index the pension,'' Mr Coleman said.

He said the average person on a public service pension received $28,368 annually, which was about $1000 a year less than the combined couple rate of the age pension and nearly $1000 less than the Henderson poverty line for a pensioner couple.

''The cause for concern with the latest inflation figures is that the CPI doesn't measure actual prices,'' he said.

''That's why the government correctly abandoned the CPI as the sole means of adjusting the age pension in 1998 and instead linked pension increases to movements in wages.

''An example of how these downward CPI adjustments take effect is if a washing machine has increased in price by 6 per cent and there has been an improvement in the latest model machine, which accounts for half of the 6 per cent price increase, the Bureau of Statistics records that as only a 3 per cent increase in the price of the washing machine.''

Ian Hooley, 64, who topped his engineering course at RMIT before he entered the public service, said he received a $24,000 a year Commonwealth superannuation pension after spending 27 years working for the federal and territory governments.

This equated to a few thousand dollars less than the average public service pension.

Mr Hooley, who worked full-time as an engineer and tertiary teacher, said he would need to continue working past the age he expected to retire.

This is partly because he spent long periods of his career working in acting capacities, sometimes in management, but due to the fact that he was not promoted to those positions, his pension was calculated at a lower rate.

''For a lot of people, their pension is nowhere near $30,000 a year,'' he said.

''ComSuper has come a long way short of expectation.

''My father was an auditor [in the public service] and I would have been earning more than him but he receives considerably more than the fortnightly ComSuper pension amount that I receive.''

Mr Hooley said he and his wife, who has also needed to keep working, have bought premium life insurance so when one of them dies the other can pay off the mortgage.

16 comments

  • So how much top up does he get from the age pension that he isnt mentioning? He would definately qualify.

    Commenter
    Jane2
    Date and time
    March 31, 2014, 8:14AM
    • Well bully for you John, I spent 20 years in the Defence Forces including 2 1/2 years in Malaysia during the Malaya conflict and all I get is $21,000 pa. Thanks for nothing
      How about we swap pensions, can we organize it next week?

      Commenter
      Al
      Location
      Sydney
      Date and time
      March 31, 2014, 8:20AM
      • Well, Al (CommenterAlLocationSydneyDate and timeMarch 31, 2014, 8:20AM)

        I would like to join you as well and swap my Defence Super Pension of just over $16,000.00 for being conscripted as a national serviceman, and staying for 20 years!

        You may also note that the pension "fair indexation" might be applied to our pension, but, in one sentence in the legislation they are saying this: "If the resultant pension is less than the floor percentage of MTAWE, it is increased so that it equals the floor percentage of MTA WE."
        in the very next sentence they say: "It is important to note that the new fairer indexation methodology will not result in a DFRB or DFRDB pension that is currently less than the MTA WE floor percentage increasing to the floor percentage"

        In other words we stay on our measly pensions! Thanks for nothing Tony!

        Commenter
        Limojoe
        Location
        Canberra
        Date and time
        April 03, 2014, 5:35PM
    • So let me get this straight. The gentleman in question is dissatisfied with the level of his pension as:

      (a) he undertook work before he commenced with the public service; and

      (b) his career was not as successful as he would have liked,

      neither of which are a matter for ComSuper.

      And by the way, on the basis of equity, would the Superannuated Commonwealth Officers' Association like to advise how much those pensions would cost if they were purchased as an annuity since as far as I understand the relevant schemes, in the CSS members were required to pay a percentage of their salary and (a) got that back as a lump sum plus fund earnings and (b) were given a pension at no cost to themselves. As for the PSS I understand the Government contribution was more generous than the 9% SGC applicable to the majority of the workforce.

      Commenter
      Faj
      Date and time
      March 31, 2014, 8:59AM
      • Slightly confused here as APS super was compulsory for a long time - presuming his contributions were not at 5% for very long as his super pension at less than 30k doesn't sound right. Mind you, if the indexation is changed, it will bring it in line with the aged pension - but can't see the rationale or any political gain in giving former public servants additional help.

        Commenter
        Been there
        Location
        ACT
        Date and time
        March 31, 2014, 9:02AM
        • Piqued by curiosity, I had a further look. It would seem that $24,000 pa is the equivalent of having $960,000 in the bank earning 2.5% pa before tax. Not too shabby in my view considering no payment was made by those in order to receive this benefit. I also noticed no mention being made those over the age of 60 receive a 10% tax rebate.

          Cry me a river. My sympathies lie with those who were in the Defense Force, particularly those who served at the pointy end.

          Commenter
          Faj
          Date and time
          March 31, 2014, 9:35AM
          • CSS and DFRDB are taxed, not like the pension if you are over 60.
            The CSS and DFRDB come out of Consolidated Revenue. That is what the future fund was for, to help pay for govt pensions. We know where that went.
            CSS and DFRDB was closed in about 1992.
            They were both compulsory, could not have another super fund.

            Commenter
            Hardarse
            Date and time
            March 31, 2014, 11:02AM
          • @Hardarse. Fair enough comment but one thing further. "The CSS and DFRDB come out of Consolidated Revenue. That is what the future fund was for, to help pay for govt pensions. We know where that went." I don't know "where it went" so can you enlighten us and also provide the proof?

            My understanding is the Future Fund still exists to assist with paying these pensions not to take on the relevant tax liabilities of individuals. However, I stand to be corrected.

            Thanking you in anticipation.

            Commenter
            Fal
            Date and time
            March 31, 2014, 11:18AM
          • Faj - I don't understand your comment "considering no payment was made by those in order to receive this benefit"

            Prior to the closing of PSS to new members, public servants contribute between 2 and 10 per cent of their salary every fortnight - compulsorily. This in the old CSS contributed 5 per cent of their fortnightly salary. The benefits of these schemes is good, but it's not correct to say the members made no payments.

            Commenter
            Thomas Gale
            Date and time
            March 31, 2014, 11:49AM
          • My understanding for Future Fund was to pay for the super of existing PS super. Not CSS or DFRDB as these come under different laws. Rudd/Gillard used most of the FF to pay for their policies, GFC. If over 60 you pay no tax on pension. Part of the CSS / DFRDB is unfunded. So I hve been told by Comsuper DFRDB and CSS(an people with CSS) will be taxed.

            Commenter
            Hardarse
            Date and time
            March 31, 2014, 11:53AM

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