Military Superannuation and Benefits Scheme (MSBS) vs ADF Super - what are ancillary benefits

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Ancillary Benefits
Ancillary benefits do not affect your future pension. Your Ancillary benefits can go as high as you like.
These are miscellaneous contributions, like salary sacrifice amounts, additional post-tax contributions, amounts rolled in from another super fund etc. They are a taxed element, meaning they have already had tax taken out at the time they were put in (and thus under current rules become taxed more favourably/tax free if withdrawn after preservation age/age 60).

Of these, salary sacrificing is worth a closer look:

From FY2014-15, everyday employees receive an additional 9.50% (minimum) on top of their base salary as an employer contribution towards their super. This counts towards the concessional contributions cap ($30,000 in FY2014-15). So if an ordinary employee's base salary was $100,000; they would be at least $9,500 through their cap with $20,500 remaining.

If a MSBS member's base salary for superannuation purposes was $100,000; they would be only $3,000 through their cap, with $27,000 remaining able to be salary sacrificed.

Why? Because most of your "Employer Benefit" is untaxed and unfunded (it is not real money, only IOU money); it doesn't count towards any cap under current rules. Only real money is counted towards the concessional cap, and the only 'real' money Defence puts in is the 3% productivity benefit (forms part of your Employer Benefit), and so this is the amount that is counted against the concessional cap. Hence the $3,000 figure from above. Note: The unfunded Employer Benefit amount accrued each year actually does count as satisfying the 9.5% superannuation guarantee, you are not being underpaid!

Source: https://www.militarysuper.gov.au/education-and-advice/faqs/ ; scroll down to "What amount counts towards the concessional contributions cap?"

Additional post-tax contributions (not increasing your % salary that goes towards member benefit) is what you should be doing if you want to contribute to your super after your concessional limit has been reached. This is classed as an Ancillary Benefit, so it has no effect on your future pension.

ADF Super

The employer contribution for the new ADF super is 16.4%. Using the above example of $100,000; $16,400 would count towards the concessional cap, leaving only $13,600 of concessional contributions remaining.

This is another major difference between MSBS and the new ADF Super, particularly for those on high salaries. Those wishing to maximise salary sacrifice amounts (probably those with high salaries) under the new scheme are disadvantaged, compared to MSBS.