The Commonwealth Ombudsman has released a report of his enquiry into the Defence Force Retirement and Death Benefits (DFRDB) scheme.
The Ombudsman, Michael Manthorpe found that while the scheme was administered in accordance with the law, some DFRDB scheme members were provided with misleading and incorrect advice about their rate of retirement pay by the Department of Defence and the Australian Defence Force (ADF).
He found this to be defective administration by Defence and recommended the Secretary of the Department of Defence and Chief of the Defence Force acknowledge the errors and provide a formal apology.
“This recommendation was accepted and a letter of apology was provided,” Mr Manthorpe said.
He said his investigation focused on the accuracy of information about commutation provided to scheme members by the Department, the ADF and the DFRDB scheme administrators, including the Commonwealth Superannuation Corporation (CSC).
He said that while the investigation found some information provided by Defence in the 1980s and 1990s regarding commutation was incorrect, he concluded that the decision to commute was, and still is, the more financially beneficial option.
The Ombudsman also looked at information provided by the CSC, both currently and historically.
“While this information has at all times been correct, using clearer language may have avoided much of the inconvenience, frustration and disappointment experienced by scheme members,” Mr Manthorpe said.
“For this reason, [I] recommended the CSC update certain documents to further clarify these issues.”
Mr Manthorpe said both the CSC and Defence were consulted on the draft report prior to its publication and confirmed both Agencies had accepted all recommendations.
The Ombudsman’s 75-page report can be accessed at this PS News link.
