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For Defined Benefit accounts
With a Defined Benefit account, your retirement benefit is calculated by multiplying a number which reflects both your years of service and your contribution rate (your multiple) with your final salary. Simply, the longer you work and the higher the rate you contribute, the bigger the number that’s multiplied by your final salary.
This means your Defined Benefit isn’t impacted by market movements – so if the market crashes you still get the same ‘defined’ amount.
Below is more information about how the multiple works.
At retirement, or when you leave the Defined Benefit account, your benefit is calculated as your multiple times your final salary. To see the latest estimate of how much you’ll get, or a projection of how much you may get when you retire, log in to Member Online.
Each year your multiple grows in relation to the amount you contribute and work. By default, your multiple increases by 0.21 each year, where 0.21 reflects 21% of your final salary.
For example, after 10 years contributing at the default rate your multiple will be 2.1, which means you’ll get 2.1 times your final salary.
Each financial year your employer reports your salary for superannuation purposes to us, which is what we use to calculate your benefit. This is your permanent full-time salary as at 1 July including allowances that have been approved by the Queensland Government (shift allowances, weekend penalties and locality allowances aren’t included). If you’re working in higher duties, the higher salary is only reported to us as your 1 July salary if you’ve been acting in the higher role continuously for at least the 12 months preceding that 1 July. This also applies when you’re seconded to another government department to act in a higher paid role.
However, if you’re 54 years old or over we calculate a final average salary.
If you leave the Defined Benefit account on or after turning age 54 your final salary is worked out by averaging your salary for superannuation purposes over the 12 months before you leave. To do this we proportion your two most recent salaries for superannuation purposes to get your final salary as shown below. If you’re 54 years old, we only proportion your salary back to your 54th birthday.
Your multiple grows each year according to your contribution rate and in proportion to how much you work. For example, after two years full time at the default contribution rate your multiple would be 0.21+0.21=0.42. If you worked 50% of the second year, it would be 0.21+ (0.21x50%) = 0.315 or 31.5% of your final salary.
Examples of how your multiple grows proportionally
If you work three days per week for the year, your multiple will grow at 3/5=60% of your standard multiple growth rate. You can find out your part-time ratio by contacting your employer.
Leave without pay
Your multiple doesn't grow while you're taking leave without pay. If you're receiving WorkCover you may be able to continue growing your super - contact us to find out more.
Leave with half pay
For the period of leave you take at half pay, the multiple will only grow in proportion to the pay rate. In the half pay example, this means the multiple will grow at half the rate.
If your salary is reduced, you may be entitled to an additional amount, called a salary reduction benefit. This is to recognise the benefit you accrued on your previously higher salary. If you have more than one salary reduction during your employment, each one is calculated separately.
You won’t receive a salary reduction benefit if your final salary is higher than your Indexed Reduced Salary. Your Indexed Reduced Salary is your 1 July salary before the reduction indexed with average weekly ordinary time earnings (AWOTE)1 growth up to the point when you access your benefit.
More details are contained in QSuper’s Defined Benefit Account Guide.
If, in the early 90s, you transferred from State or Police Super2 to the Defined Benefit account, an additional transfer multiple (ATM) is applied each year as extra multiple growth until you reach age 60 (for State Super transfers) or age 55 (for Police Super transfers).
Your ATM grows at the same rate each year and isn’t affected by part-time hours or leave without pay. The ATM ensures your Defined Benefit account is equal to the benefit you would have been entitled to in State or Police Super if you hadn’t transferred to the Defined Benefit account.
If you’re 54 years old or over we calculate a final average salary.
If you leave the Defined Benefit account on or after turning age 54 your final salary is worked out by averaging your salary for super purposes over the 12 months before you leave. To do this we proportion your two most recent salaries for super purposes to get your final salary as shown below.
If you’re 54 years old, we only proportion your salary back to your 54th birthday.
Colin retires on 1 September 2015 at age 62. His current salary for superannuation purposes is $85,000 however he has only contributed at this salary for 2 months. His previous salary was $80,000.
To average these two salaries, we add the 10 months' worth of salary at $80,000 per annum which equals $66,666 to the final 2 months of salary at $85,000 which equals $14,166. This gives Colin a final salary of $80,833.
Find out more about how the Defined Benefit account works and read our FAQs.
1. AWOTE is a measure of wage levels across Australia and is calculated by the Australian Bureau of Statistics.
2. State Super and Police Super are closed ‘legacy’ schemes that provided a defined pension in retirement.