16 December, 2009

Dear Mr Palmer

Thank you for your email of 26 September 2009, regarding the review of the pension indexation arrangements in Australian Government civilian and military superannuation schemes that was conducted by Mr Trevor Mathews.

I acknowledge that the review findings by Mr Matthews and the Government response may have caused disappointment for some recipients of Australian Government civilian and military superannuation pensions. 

Mr Matthews is an international leader in the global pensions and life insurance industry, an Australian citizen, past president of the Institute of Actuaries of Australia, and currently a prominent actuary in the United Kingdom.  As such he was eminently qualified to carry out an independent review of the pension indexation arrangements in the Australian Government civilian and military superannuation schemes.

The Government fully supports Mr Matthews’ findings and recommendations and has no plans to move away from the Consumer Price Index for indexing the pensions of Commonwealth superannuants.

I note that you have also raised issues in relation to the design of the Defence Forces Retirement Benefits Scheme (the DFRB), the Defence Force Retirements and Death Benefits Scheme (the DFRDB) and/or the Military Superannuation Benefits Scheme (the MSBS).  As these issues fall within the portfolio responsibilities of the Minister for Defence Personnel, Materiel and Science, the Hon Greg Combet AM, MP, I have referred your correspondence to him for his consideration.

Thank you for taking the time to write on these issues.

Yours sincerely

Lindsay Tanner