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Frequently asked questions about your defined benefit
Defined Benefit accounts are a type of superannuation product available to people employed by the Queensland Government and related entity employers until 12 November 2008, when the scheme was closed to new members. A Defined Benefit account provides you with confidence in what you'll get when you retire.
Your retirement benefit, or defined benefit fund entitlement, is calculated by multiplying a number that reflects both your years of service and your contribution rate (your multiple) with your final salary. The longer you work and the higher the rate you contribute (up to the maximum), the bigger your benefit will be when you retire. Estimate your final benefit.
You can enjoy peace of mind knowing you’ll receive your super when you retire because the Queensland Government is required to pay your defined benefit. Your employer bears any investment risk and your retirement savings aren't subject to market fluctuations.
A defined benefit is generally a lump sum benefit, unless you are accessing a defined pension due to disability. When you retire, you can open a Retirement Income account to turn your super into an income stream.
If you have a State account, Police account, or Parliamentary account, you can access a defined benefit income stream - please see the State Account Guide (pdf), Police Account Guide (pdf), or contact us.
A super fund that has members in their defined benefit product and/or their defined benefit pension scheme is a defined benefit fund. This is a product where your retirement benefits depend on more than just contributions to the account and investment earnings.
There are a few key benefits to a defined benefit plan such as our Defined Benefit account:
If you want to know how much you will receive as a defined benefit when you retire, you can get a 2-year projection when you log in to Member Online or see your annual statement for an estimate of your benefit at age 60 or 65. To get a more detailed quote for your defined benefit, please contact us.
If you want to know the worth of your pension/income stream when you retire, you can use our super and retirement planning calculators to see what your projected defined benefit might translate into as annual income with different types of retirement products.
If you're asking about the worth of a defined pension you're receiving because of illness or injury, it may be easiest to contact us for more information and/or seek financial advice.
There are many benefits to our Defined Benefit account, Police account, and State account, that are not available with other account types.
Your money is protected from by stock market fluctuations and losses because it doesn't rely on investment returns, as your employer has committed to providing your entitlement.
In addition, you don’t pay any fees or insurance premiums - these are funded by the pool of members with a Defined Benefit account.
As your retirement planning is a big decision, it can be wise to get professional financial advice first, so you can be confident about using your Defined Benefit account to prepare for retirement.
The question of whether or not you move your defined benefit pension is a big decision, and you should get professional financial advice before acting. As a QSuper member, you have access to financial advisers who can help you make a retirement plan right now. So you’ll be confident about using your Defined Benefit account to maximise your potential in retirement.
Here's a quick comparison of how our different products work, so you can decide which benefits you are most interested in.
Yes, you may be eligible to cash in your defined benefit when you retire if you've reached your preservation age (55 to 60 depending when you were born). If you haven't retired yet but you leave the Defined Benefit account due to changing jobs, you will effectively roll over part of your defined benefit to an Accumulation account (see below for details). For more information on accessing your defined benefit money, read the rest of this page or the Defined Benefit Account Guide (pdf).
When you resign from the employer who has been contributing to your defined benefit, your Defined Benefit account will close, unless you move to another employer who can pay into a Defined Benefit account within 1 month of leaving.
If you’re leaving your employer and your defined benefit is not continuing, please let us know and complete this form (pdf) to tell us how you want to invest your money.
If we don’t hear from you or you don’t return the form, we’ll transfer your benefit as follows.
Find out more about our Accumulation account or read the Defined Benefit Account Guide (pdf) for more information.
When you retire and reach the age you can access your super, you can either leave the money in your Accumulation account and make withdrawals when you need to, and/or use the money for a Retirement Income account and/or a Lifetime Pension.
Find out more about your retirement options or register for one of our retirement webinars.
If you’ve reached the age you can access your super and want to start working less, you can transition to retirement – receiving payments from your super while you're still working. During this time, your Defined Benefit account stays open and your multiple is reduced proportionately to reflect the amount you transfer out.
You can transfer some or all of your defined benefit to our Transition to Retirement Income account if you’re:
For a quote of your defined benefit projected up to 2 years, contact us.
To find out more, you can attend an exclusive member seminar, speak with a professional financial adviser, or read our Income Account and Lifetime Pension Product Disclosure Statement.
There are a few main differences between your employer part going into a Deferred Retirement Benefit (DRB), and transferring the discounted value to an Accumulation account:
Because you can't transfer back into your DRB if you change your mind, we recommend you speak with a financial adviser to help you make any decisions about your DRB.
The table below shows how much your employer's part will be discounted by if you choose to transfer it into an Accumulation account rather than a Deferred Retirement Benefit. You can also see your annual statement or contact us for a quote of your transfer value.
Because the defined benefit scheme was created for your retirement savings, it was designed for you to stay in it until at least age 55.
To determine how much your employer should contribute to pay for your benefit by age 55, the Queensland Government uses an assumed investment return rate of 7%. This means if you transfer your funds out before age 55, we need to discount the amount transferred to reflect the investment earnings not yet received.
The discount formula is:
Within this calculation, 1.0288 means 1.07/1.04, which equals the assumed investment returns of 7%, offset by the 4% wage growth (based on AWOTE1) that no longer needs to be paid.
This means, if AWOTE grows at 4% per year, you would need to get investment earnings of 7% each year on your transfer value (the employer's part) if you wanted to match the value you would have received in the DRB.
1. AWOTE is a measure of wage levels across Australia and is calculated by the Australian Bureau of Statistics.
As a Defined Benefit account member, you automatically receive insurance, with no insurance premiums for you to pay:
Your amount of insurance cover is the difference between the benefit you've accrued when you claim, and the projected benefit you would have accrued if you'd worked until age 55 and contributed at 5% (6% for police).
You can't cancel your insurance - it will stop when:
If you have an Accumulation account, you can get additional insurance through that account if you're eligible.
Yes, your account automatically includes income protection insurance until you turn 75 years old or leave the account. If you’re temporarily unable to work due to illness or injury, income protection may provide regular benefit payments of up to 75% of your salary for up to 2 years.
Before your income protection benefits can start, you'll need to use all your paid sick leave, and then take 14 days of unpaid sick leave in a row. You can’t take any paid leave (like annual or long service leave) during this period, but you may be able to apply to Centrelink for income support benefits.
During your first 5 years of cover, we can't pay income protection benefits for a pre-existing condition (see the Defined Benefit Account Guide (pdf)).
There are some cases where we may have to reduce or stop your income protection benefit, so you'll need to let us know as soon as possible if you:
Police officers usually aren’t able to receive income protection because you can access the Sick Leave Bank instead. However, you may be able to access income protection if you’re a commissioned police officer with a contract to stay in the service over the age of 60, and you've been contributing between 2% and 5% of your salary while working full-time. If this is the case, please contact us.
Magistrates and members of parliament usually aren't able to receive income protection because they cannot exhaust their sick leave entitlement, so they would be highly unlikely to become eligible.
If you experience a disability that means you’re unlikely to ever work again in any job for which you’re reasonably qualified by education, training, or experience, you’ll be paid a TPD benefit.
If you’re over 55 years old, you’ll be paid the entitlement you've accrued so far.
If you’re under 55 years old, you’ll be paid the entitlement you've accrued so far, plus your projected defined benefit entitlement to age 55. You can choose to take your benefit as either a lump sum or a defined pension. For information about these two options, please read the Defined Benefit Account Guide (pdf).
If you don’t meet the total and permanent disability conditions, you may still qualify for permanent and partial disability (PPD). This means you’re considered permanently unable to perform your normal duties efficiently. In this case, you can't make an insurance claim, but you may be able to access some of your super as a PPD benefit.
If you or your employer asks us to investigate a permanent disability benefit, we'll ask for a detailed medical report from your treating medical specialist. You or your employer are responsible for the cost of this initial report, and QSuper will pay for the costs of any additional medical information required to assess your claim.
If you’re found eligible for PPD, you may be able to access part of your existing super, while the rest stays in your super until your retirement age. If you joined after 1 July 1999 and haven't rolled in any money since then, your situation may be more complicated, so please contact us for more information.
If you’re diagnosed with a terminal medical condition, you may be able to claim a tax-free benefit. If you are under 55 years old, you may be paid your defined benefit balance so far, plus your projected benefit to age 55. After your death, your children may receive a pension from your defined benefit if they are eligible.
If you have Accumulation account insurance, you can usually access this terminal illness benefit at the same time (see the Accumulation Account Insurance Guide (pdf)).
To apply to access your super for a terminal medical condition, you can use the Terminal Illness Claim form (pdf), or you or your representative can contact us to let us know about your situation. Find out more here.
Your Defined Benefit account generally pays a death benefit as a lump sum to your estate or your dependants (your spouse, children, financial dependants, or someone in an interdependent relationship) when you die.
Your children may receive a pension of fortnightly payments if they are under age 18 (or under age 25 if they’re studying full-time, or any age if they have a permanent disability at the time of your death) and:
To find out the current child's pension rates and how they increase each year, and to learn how tax might apply to your child's pension, please read the Defined Benefit Account Guide (pdf).
Police officers have different standard contribution arrangements because you generally can’t remain in service once you turn 60. So having a higher level of standard contribution rates means when you retire, you can have the same level of confidence as other members.
Yes, as a Police account member, you automatically receive insurance, with no insurance premiums for you to pay:
For more information, please see the Police Account Guide (pdf).
Because police officers receive Sick Leave Bank entitlements with the Queensland Police Service, you usually aren’t able to receive income protection as a police officer.
However, you may be able to access income protection if you’re a commissioned police officer and have a contract to stay in the service over the age of 60, and you've been contributing between 2% and 5% of your salary while working full-time. If this is the case, please contact us to find out if you can access income protection.
The tax you pay when you make a withdrawal from a defined benefit will depend on your age and whether you are paid the benefit through a defined pension, Income account, or a lump sum.
After you turn 60, any money you take out of your super – either as a lump sum or an Income account – is usually tax-free. If you take your benefit as a defined pension, you may have to pay tax if your defined pension is more than $100,000 per year.
If you withdraw some of your superannuation before age 60, you are taxed differently depending on how you access your defined benefit and your age.
For more information on how super is taxed, read our Tax Explanation factsheet.
If you still have questions after reading this page, you can find more information in the Defined Benefit Account Guide (pdf), attend one of our defined benefit seminars/webinars, or contact us. We're here to help you make the most of your Defined Benefit account.
If you're considering your options and not sure what to do with your Defined Benefit account, you can get financial advice.