Note: As at 1 January 2016, the defined benefit scheme is no longer accepting new members.
All new members enlisting in to the PNG Defence Force and contributing to the Fund will be members of the accumulation scheme.
However, if you are already contributing through the defined benefit scheme, you will continue to do so.
The accumulation scheme receives contributions from various sources.
Members contribute 6% or more (maximum of 15%) of their fortnightly salary.
Note: The State doesn’t contribute to the fund on a fortnightly basis (as it does with an accumulation fund). However it pays 60% of lump sum benefits and pensions on a member’s retirement.
Members with less than 20 years of service don’t have an employer benefit and receive their contributions plus accrued interest.
Interest is credited to member accounts:
This allows the compound interest effect to work and grow members’ retirement savings.[1]
Gratuity is a State-funded component of benefits available to defined benefit scheme members who contribute for 8 years or more but less than 20 years.
The gratuity rate is equivalent to K320 after 8 years’ service plus K90 per year after that.
Members of the defined benefit scheme who are discharged from the PNG Defence Force are classified into three categories:
| Length of service | Benefit |
|---|---|
| Service of less than 8 years | Receives the 6% contributions plus accrued interest |
| Service of 8 years or more but less than 20 years | Receives the 6% contributions, accrued in-terest and a gratuity benefit (as stated above) |
| Service of 20 years or more | Qualifies for pension which they can take as either:
|
Under a bona fide retrenchment exercise, defined benefit members have three options:
Carefully consider your personal needs when deciding which option to take. Make an informed decision only after you fully understand the type of benefit that best suits your needs when you retire.
Contact us for advice or to ask questions.
See below for medical pension benefits.
If a contributing member or pensioner dies, the following occurs:
A pension is a regular income provided by the fund and State. It is paid fortnightly to a retiree as a lifetime benefit after active employment.
The pension’s features include:
Note: This benefit payment option is only available to members of the defined benefit scheme.
To commute a benefit is to divert a portion of your pension benefit to a lump sum. Members who contribute for more than 20 years and become eligible for a pension benefit may commute some of that pension to a lump sum payment not exceeding 50% of total retirement benefits as calculated.
Contact us for more information about commutation.
The main types of pension are:
You’re eligible for a pension if you’re a current member of the defined benefit scheme and you meet any of these requirements:
DFRBF funds 40% of the pension, while the state (employer) funds 60%.
Your pension is a pre-calculated amount that considers your final salary and length of service only.
The amount also depends on how much of the gross benefit was taken out as a lump sum (as a lump sum decreases the final pension amount).
Contact us to get assistance calculating your pension amount.
Pensions with this fund are based on the consumer price index (inflation rate) with reference to the funds actuarial advice approved by the Board of CTSL every two years.
If a male pensioner dies, his pension can be transferredto his wife and any children under 18 years of age.
If the wife has also died, or she dies or remarries while being a widow pensioner, the pension can be transferred to the member’s nominated child dependent under 18 years.
A medical pension is a benefit for Fund members who are physically or mentally incapacitated, and discharged by the PNG Defence Force on medical grounds.
This benefit is not based on length of service.
The table below shows the three levels of medical pension (classes A, B and C):
| Class | Disability range | Pension factor |
| Class A | 60% - 100% | 53% (equivalent to 37 years' service) |
| Class B | 30% - 59% | 28% (equivalent to 22 years' service) |
| Class C | Up to 29% | Normal discharge |
Note: The percentage (%) awarded for a disability (injury or illness) relates to the effect of the disability on the member’s performance overall – not the performance of one body part.
The CTSL medical panel assesses all claims for medical benefits.
The panel is made up of CTSL management and board, two private doctors, and the director of health services or their nominee.
The panel carefully assesses each case to make sure members are put in the right classes for their particular disabilities.
Medical pensioners in Class B or Class C are eligible for one review after three years.
Under a bona fide retrenchment exercise, defined benefit members have three options:
Withdraw 100% of their benefits – contributions, accrued interest and State contribution.
If entitled to a pension, take their retirement benefits as part-lump sum and part-pension (lump sum options will not exceed 50% of total gross benefits).
Have up to 100% of their total retirement benefits paid as a lifetime pension.
Carefully consider your personal needs when deciding which option to take. Make an informed decision only after you fully understand the type of benefit that best suits your needs when you retire.
Contact us for advice or to ask questions.
See below for medical pension benefits.
If a contributing member or pensioner dies, the following occurs:
If a married serviceman dies, his wife can receive 5/8 of a pension equivalent to a ‘Class A’ medical pension with a pension factor of 53% (the highest pension factor available).
If a serviceman who is unmarried or a widower without children dies, his contributions and accrued interest are paid to his beneficiaries.
If a male pensioner dies, his spouse can receive 5/8 of the pension.
If a serviceman or pensioner dies, his child dependents under 18 years can receive the pension.
If a servicewoman dies, her retirement savings are paid to her beneficiaries.