The Defence Force Retirement Benefit Fund (the Fund) is an authorised superannuation fund under the Superannuation (General Provisions) Act 2000. (Read more about superannuation.)
The Fund has more than 3000 contributors and 1700 pensioners and has two main aims:
- to provide retirement benefits to members and their dependents upon discharge from the Defence Force, medical discharge or death
- to provide early access to retirement savings for housing-related purposes.
Fund performance
We are proud of how well the Fund has performed in recent times, giving our members confidence in the security of their investments. We are committed to continuing this success into the future.
Read our annual report for details of the Fund’s achievements.
Retirement benefits
The Fund currently has two schemes through which members receive retirement benefits:
- accumulation scheme – a large lump sum payment on retirement
- defined benefit or pension scheme – a guaranteed, ongoing pension on retirement.
As at 1 January 2016, the defined benefit scheme is closed to new members.
All new members enlisting in to the PNG Defence Force and contributing to the Fund will now be members of the accumulation scheme.
Members who already contribute to the defined benefit scheme will continue to do so.
Accumulation scheme
The Fund’s new accumulation scheme is the most popular scheme (or fund) available.
Under the scheme, members receive a large lump sum payment when they retire.
A member contributes 6% or more (up to 15%) of their fortnightly salary to the fund, while their employer contributes 8.4%.
The amount in an accumulation fund grows due to:
- member contributions
- a generous employer contribution
- long-term compounded interest.
Read more about the accumulation scheme.
Defined benefit or pension scheme
The defined benefit scheme is a pension fund (rather than a large lump sum payment like the accumulation scheme).
Benefits are pre-calculated using a formula that considers the member’s salary, length of service and age.
A member is usually eligible for pension benefits after 20 years of continuous service with the Defence Force.
If a contributor or pensioner dies, 62.5% of the pension is paid to the widow and an additional K22.50 to each dependent child under 18 years.
The Fund receives:
- fortnightly contributions from members at 6% of gross salary
- returns from investments
- a guarantee from the state to pay 60% of pension benefits when they fall due.
As the employer contributes any difference in market shortfall, benefit payments are guaranteed at the pre-calculated level.
Read more about the defined benefit scheme.
History of the Fund
In 1975, the PNG government took over the administration of the Defence Force Retirement Benefit Fund (the Fund) from Australia for the PNG Defence Force.
The Department of Finance administered the Fund under Defence Force Retirement and Death Benefits Act 1973 (DFRDB Act).
By 1982, the Fund’s membership and asset base had been transferred to the State Services and Statutory Authority Superannuation Fund (SS & SASF) for administration. SS & SASF was later renamed the Public Officers Superannuation Fund (POSF).
While the Fund was administered by SS & SASF, a board of directors was established to direct its activities and ensure compliance with governing rules. The Fund’s accounting was maintained and reported separately.
In 1996, the Fund’s administration was transferred to Kina Securities Ltd until 1998, when the board established a new caretaker entity called the DFRB Board.
On 1 January 2003, Comrade Trustee Services Limited (CTSL) was appointed trustee for the Fund in line with the Superannuation (General Provisions) Act 2000.
In November 2015, the National Parliament passed amendments to the DFRDB Act, which included the creation of the accumulation scheme under the Fund.