We’re pleased to share more details on how stand down affects your compulsory member contributions as a member of Division 1 or Division 2 with a minimum guaranteed benefit from a former Australian Airlines plan.

Your Credited Service, a key component to calculating your defined benefit, will continue to accrue while you’re stood down. This means your defined benefit will continue to grow when you’re stood down. It also means that your obligation to make your compulsory member contributions continues while you’re stood down.

As the design of your defined benefit includes a minimum guaranteed benefit in some cases, your compulsory member contributions and the investment earnings they receive are important in determining whether the minimum guaranteed benefit will increase your total benefit. Since your compulsory member contributions aren’t coming out of your pay during this time, you have two choices to help you satisfy your obligation to pay compulsory member contributions.

Your options

Option 1: Request to stop making compulsory member contributions and have your benefit adjusted

You can request to suspend your obligation to pay compulsory member contributions while you’re stood down and have your benefit adjusted to reflect this suspension. Your defined benefit will continue to grow if you choose this option, but we will add some extra steps to the way we calculate your benefit to make sure the net effect of your minimum guaranteed benefit is the same as if you had made your compulsory member contributions. Part of this process involves creating an offset account to track your unpaid contributions. Investment earnings will be applied to the offset account from 1 December 2021.

or

Option 2: Confirm you will continue to make compulsory member contributions

If you choose this option, we’ll send you a statement detailing your unpaid compulsory member contributions and the due date by which you must pay them each quarter. Please note that if you choose this option, you are agreeing that if you don’t pay by the due date, you will be treated in accordance with Option 1; that is, you have requested to suspend your obligation to pay all outstanding and future compulsory member contributions while you’re stood down.

How to make your choice

Please read the information below about how each option works before making your choice at the bottom of this page.

How each option works

Option 1: How requesting to suspend your compulsory contributions will impact your benefits

If you’re either:

  • a member of Division 1; or
  • a member of Division 2 with a minimum guaranteed benefit from a former Australian Airlines plan,

and request to suspend making compulsory member contributions while you’re stood down, we will need to make an adjustment to your benefit and the way it’s calculated. This is because, in some circumstances, your compulsory member contributions help to fund your defined benefit and they can affect the way any minimum guaranteed benefit, if you have one, is calculated.

What is a minimum guaranteed benefit?

All members of Division 1, and members of Division 2 who were members of either the Australian Airlines General Superannuation Plan or Australian Airlines Flight Attendants’ Superannuation Scheme, may have one or more guarantees that their benefits will be equal to a minimum amount. Whether a guarantee applies and how it is calculated can depend on a number of circumstances, such as the type of benefit being calculated (for example, whether it’s a retirement benefit or a retrenchment benefit), the division you are in and your age at that time.

When we calculate a member’s total benefit where a minimum guaranteed benefit may apply, we will:

  • calculate your benefit ignoring any minimum guarantee (called your “Regular Benefit”);
  • calculate your benefit using the formula of any applicable guarantees that apply to you (if there are more than one, we calculate all of them); and
  • give you the highest amount

How we’ll adjust your benefit if you request to stop making compulsory contributions

As your overall super benefit is made up of both accumulation and defined benefit components, it will be adjusted by using the process set out below:

  1. We’ll create an offset account to track your unpaid compulsory contributions and the net investment earnings they would have earned. This account is our way of keeping track of any compulsory member contributions that have not been paid, so we can ensure that these missed contributions are taken into account when it’s time to calculate the total value of your benefit. We will also calculate the value of your Member Account as though you made your full compulsory member contributions throughout the time you were stood down. The total value will include investment earnings on the unpaid compulsory member contributions, using the same interest rate that will apply to your offset account
  2. When it’s time to calculate your benefit, we will use the Member Account calculated in step 1. This step will include us taking account of any applicable minimum guaranteed benefit. Because the value of your Member Account can affect these calculations, it is important that we use the increased value of your Member Account as calculated in step 1
  3. Your total benefit will then be calculated by deducting the value of the offset account referred to in step 1 from the value of your total benefit calculated in step 2.

This all means that the offset account will generally only have an impact on our calculations if you have a minimum guaranteed benefit that is higher than your Regular Benefit. Here are some examples to show how this works.

About offset accounts

Some important things you should know about offset accounts (where there are outstanding unpaid contributions or interest):

  • the balance of the account is negative and is included when calculating your total benefit
  • the balance includes the amount of any contributions that have not been paid
  • when interest is applied, the balance will increase in line with investment earnings applied on this account (and decrease in line with negative investment earnings applied on this account). For example, if your offset account is -$10,000 and a positive earnings rate of 5% is applied, your offset account will grow to -$10,500.

Initially, the offset account won’t have any interest applied. Interest will start to apply on the offset account from 1 December 2021. The interest rate will be the same as that used for your Member Account (which is the same rate that applies to Qantas Super’s defined benefit assets). You can view these by downloading our weekly credited interest rates (CIRs).

Examples

Here are some simplified examples to show how this will work. The example that may apply to you will depend on a number of factors, including your division, the type of benefit you receive, and your age. If you’re unsure about your situation and which example applies to you, please call us on 1300 362 967.

  • If your total benefit is the sum of accounts only because no minimum guaranteed benefit applies

    Sometimes a minimum guaranteed benefit will not apply. For example, it will not apply to members in Division 1 whose benefit is calculated before they have reached their Superannuation Date.

    Here is a simple example, where we imagine Fred does not have a minimum guaranteed benefit and his total benefit is only made up of a Member Account and a Company Account.

    Fred’s balance of those two accounts is:

    • Member Account = $300,000
    • Company Account = $500,000
    • His unpaid compulsory member contributions (including investment earnings) are $15,000.

    Fred’s super benefit is calculated as follows:

    Step 1: Create an offset account for the compulsory member contributions (including investment earnings) that Fred has not paid:

    • Offset Account = -$15,000.
    • Calculate Fred’s benefit as if his compulsory member contributions have been fully paid:
    • Member Account = $300,000 + $15,000 = $315,000

    Step 2: Check if a minimum guaranteed benefit applies. In Fred’s case, he is not entitled to a minimum guaranteed benefit so his benefit is calculated as:

    • Member Account from step 1 + Company Account = $315,000 + $500,000
    • = $815,000

    Step 3: Fred’s total benefit is calculated by deducting the offset account calculated in step 1 from the benefit calculated in step 2. Remember, because the balance of the offset account is negative, this means we are deducting the balance of the offset account.

    • = $815,000 – $15,000
    • = $800,000

    In this case, the negative value of the offset account is equal to the positive value of the unpaid member contributions that were added to Fred’s Member Account.

  • If your total benefit is increased by a minimum guaranteed benefit

    Here is an example of how the adjustment to the benefit works where a minimum guaranteed benefit applies.

    If Fred’s benefit in the example above included a minimum guaranteed benefit of $850,000 (based on his Member Account calculated in accordance with step 1 below), then the calculation of the benefit is as follows:

    Step 1: Create an offset account to track the compulsory member contributions (including investment earnings) that Fred has not paid:

    • Offset Account = -$15,000
    • Calculate Fred’s Member Account as if his compulsory member contributions have been fully paid: Member Account = $300,000 + $15,000 = $315,000

    Step 2: Fred’s Regular Benefit, using the Member Account is Step 1, is:

    • Member Account from step 1 + Company Account = $315,000 + $500,000
    • = $815,000

    Meanwhile, Fred’s minimum guaranteed benefit is $850,000. In this case, the highest of these two amounts is $850,000, the minimum guaranteed benefit.

    Step 3: Fred’s total benefit is calculated by deducting the offset account calculated at step 3 from the benefit calculation at step 2. Remember, because the balance of the offset account is negative, this means we are deducting the balance of the offset account.

    • = $850,000 – $15,000
    • = $835,000

    In this example, it is important we use Fred’s Member Account in step 1 for our calculation so we can accurately determine how his Regular Benefit compares to his minimum guaranteed benefit, and which benefit he should receive. In this case, Fred’s minimum guaranteed benefit is higher, so we deduct his offset account from the minimum guaranteed benefit.

    In this example, Fred’s minimum guaranteed benefit raised his final benefit from $800,000 to $835,000 (that is, by $35,000). This is the same net increase he would have received if he had paid his compulsory member contributions, in which case his benefit would have increased from $815,000 to $850,000 (that is, also by $35,000).

    If we had not done this, and had simply given Fred his minimum guaranteed benefit without deducting the offset account from it, he would have received an extra $50,000. This would give Fred the benefit of the compulsory member contributions he didn’t make, and result in Fred being better off than his colleagues who had kept paying their compulsory member contributions.

  • If your Regular Benefit is already higher than the minimum guaranteed benefit

    If Fred’s benefit in the example above included a minimum guaranteed benefit of only $750,000, then there is no change to his total benefit.

    Remember, Fred’s account balances are:

    • Member Account = $300,000
    • Company Account = $500,000

    The calculation of his benefit in this case is as follows:

    Step 1: Create an offset account to track the compulsory member contributions (including investment earnings) that Fred has not paid:

    • Offset Account = -$15,000
    • Calculate Fred’s Member Account as if his compulsory member contributions have been fully paid: Member Account = $300,000 + $15,000 = $315,000

    Step 2: Fred’s Regular Benefit, using the Member Account in step 1, is:

    • Member Account from step 1 + Company Account = $315,000 + $500,000
    • = $815,000

    Meanwhile, Fred’s minimum guaranteed benefit is $750,000. In this case, the highest of these two amounts is $815,000, the Regular Benefit.

    Step 3: Fred’s total benefit is calculated by deducting the offset calculated at step 3 from the benefit calculation at step 2. Remember, because the balance of the offset account is negative, this means we are deducting the balance of the offset account.

    • = $815,000 – $15,000
    • = $800,000

    As in the case where there is no minimum guaranteed benefit, the negative value of the offset account is equal to the positive value of the unpaid member contributions that were added to Fred’s Member Account.

Option 2: What you need to do if you have confirmed you will keep paying your compulsory member contributions

If you confirm to us that you will keep paying your compulsory member contributions, it’s important that you pay them by the due date specified on your quarterly statement.

As part of confirming that you will keep making those contributions, you are agreeing that if you do not make them in the time stipulated, you’ll be treated in accordance with Option 1. That is, you’ve requested to suspend your obligation to pay all outstanding and future compulsory member contributions while you’re stood down. In that case, we will create an offset account and the matters set out above under the section “Option 1: How requesting to suspend your compulsory contributions will impact your benefits” will apply to your offset account.

You can pay your compulsory member contributions in three ways:

Make BPAY contributions

You can make contributions to your account via BPAY, paying the post-tax contributions you have been advised are owing. We’ve created a new BPAY biller code specifically for your compulsory member contributions to make sure they’re classified correctly. You must use these new details going forward. You can find these details by logging in and clicking the ‘Personal Details’ tab.

If you don’t use this new BPAY biller code when paying your contributions, they will be classified as ‘voluntary’ instead of compulsory member contributions when they reach your super account, and they will not be counted towards your compulsory member contributions.

Note that contributions made through BPAY contributions are treated as post-tax contributions, and will count towards your non-concessional contributions cap. As a member of a defined benefit division in Qantas Super you are currently unable to claim a tax deduction for compulsory member contributions or contributions towards your compulsory contribution offset account made via BPAY.

Salary sacrifice when you return to work

If you have returned to work, you can pay your outstanding contributions through a salary sacrifice arrangement with Payroll. You can do this by filling out the Stand Down Member Contributions Salary Sacrifice Agreement form on The Terminal. If you choose to set up an arrangement, you must pay the pre-tax amount you have been advised you owed.

If you pay this way, your unpaid contributions and any future updates will be managed by Payroll moving forward. You must be stood up at the time that you fill out the form to enter into the arrangement.

Transfer funds from your voluntary accumulation accounts

You can opt-in to transfer funds from your voluntary accumulation accounts to cover your unpaid compulsory member contributions. In order to do this, an offset account will be created to track the unpaid contributions that have accrued during periods of stand down. We’ll then transfer the amount owing from your voluntary accumulation accounts (which include any voluntary contributions accounts you may have, or any Rollover or Other Employer accounts) to this offset account each time your employer advises us of your debt, before the stated due date for the payment of that debt.

If there are insufficient funds in these accounts to cover your outstanding debt by each due date, then investment earnings will be applied to the offset account from the due date using the same rates that apply to Qantas Super’s defined benefit assets.

Frequently Asked Questions

  • What happens if I've already been making contributions?

    If you’ve been making voluntary contributions via BPAY, these have gone into an accumulation account and received investment returns. If you would like these to go towards your compulsory member contributions, you can opt in to transfer funds from your voluntary accumulation accounts. This will work as explained above, under payment option ‘Transfer funds from your voluntary accumulation accounts’.

    If you opt in, we will initially transfer the amount you have owing as of the last statement you receive from us on or before 31 October 2021, with this transfer to be made effective prior to 1 December 2021. We’ll then transfer the amount owing each time your employer advises us of your debt, before the stated due date for the payment of that debt.

    If there are insufficient funds in these accounts to cover your outstanding debt by the due date, then investment earnings will be applied to the offset account from the due date using the same rates that apply to Qantas Super’s defined benefit assets.

  • What happens to my benefit if I have unpaid compulsory member contributions and take redundancy?

    For Division 1 members, and Division 2 members with a minimum guaranteed benefit from a former Australian Airlines plan, we will take account of your unpaid compulsory member contributions at the time your benefit is paid to you or transferred to Gateway. The way we do this involves a number of steps, but overall the effect is that we will treat any unpaid compulsory member contributions as being owed to us, and your total benefit payment will be adjusted accordingly. If you are made redundant before 1 December 2021, the adjustment to your total benefit will be the same as if you had an offset account created for those unpaid contributions (like Option 1).

    If an offset account has been set up, we may also need to take into account any contributions that Qantas Payroll need to report to us if they have not yet been added to your offset account at the time you leave the Qantas Group.

  • If I confirm I’ll keep paying my compulsory member contributions, how long will I have to pay them?

    For any statement we issue on or before 31 October 2021, you need to pay those contributions so that they are received by Qantas Super by 30 November 2021. For statements issued after that date, we’ll generally give you at least four weeks from the date we issue your quarterly statement to pay your compulsory member contributions. If you haven’t paid them in full by then, you will be treated in accordance with Option 1; that is, you request to suspend your obligation to pay all outstanding and future compulsory member contributions while you’re stood down. Please make any payment with enough time to ensure it reaches your account by the due date.

  • What happens if I confirm I’ll keep paying my compulsory member contributions but miss a payment due date?

    If you haven’t paid your contributions in full by the due date or entered into an arrangement with Payroll to pay them by salary sacrifice, you have agreed that you will be treated in accordance with Option 1; that is, you request to suspend your obligation to pay all outstanding and future compulsory member contributions while you’re stood down. In that case, as a member of Division 1 or a member of Division 2 who has a minimum guaranteed benefit from an Australian Airlines plan, we will create an offset account to track all your outstanding and future compulsory member contributions. From 1 December 2021, this account will have interest applied to it at the same rate as your Member Account (which is the same rate that applies to Qantas Super’s defined benefit assets).

  • Why are you adding the unpaid contributions to my member account when I haven’t actually made them?

    Even if you have chosen not to pay some or all of your compulsory member contribution, you should always receive, as a minimum, your Regular Benefit based on your actual contributions.

    If your minimum guaranteed benefit is higher than your Regular Benefit based on your actual contributions, and we deducted the full offset from your minimum guaranteed benefit, there are some cases where that might result in you getting less than your Regular Benefit.

    This could happen if your minimum guaranteed benefit is slightly higher than, but close to, the value of your Regular Benefit based on actual contributions.

    We always end up with the right result if we calculate your Regular Benefit assuming you had paid all your compulsory member contributions, then deduct the offset from the higher of your adjusted Regular Benefit or your minimum guaranteed benefit.

    For example, if:

    • Fred’s Regular Benefit based on actual contributions is $800,000:

    Company Account = $500,000 +

    Member Account = $300,000

    • Fred’s Regular Benefit assuming he had made all his compulsory member contributions is $815,000:

    Company Account = $500,000 +

    Member Account = $300,000 + Unpaid compulsory contributions = $15,000

    • Fred’s minimum guaranteed benefit is $810,000

    In this case, Fred’s Regular Benefit, including his unpaid compulsory member contributions, is higher at $815,000. When we deduct the offset account of $15,000, he will receive $800,000.

    If we had not accounted for his unpaid contributions in his Member Account, Fred’s minimum guaranteed benefit would be higher at $810,000 compared to his Regular Benefit based on actual contributions which is $800,000.

    However, when we deduct the offset account of $15,000 from his minimum guaranteed benefit, he would only receive $795,000 as his final benefit, leaving him $5,000 worse off.

  • What’s the difference between my post-tax and pre-tax amounts owing?

    Your compulsory member contributions owing are determined on a post-tax basis. However, if you choose to continue paying your contributions, you can choose to pay them on a pre-tax or post-tax basis. If you want to pay via BPAY, you must pay the post-tax amount owed. If you are back at work and want to pay via salary sacrifice, you must use the pre-tax amount owed.

    This is because salary sacrifice contributions are paid from your pre-tax salary, and are taxed at 15% when they reach your super account. This means the amount you salary sacrifice may not match up to the amount owing when it’s determined on a post-tax basis.

    For example, if you owe $500 on a post-tax basis and contribute $500 via salary sacrifice, your contribution will have $75 in tax (or 15%) deducted when it reaches your super account. That means you have only contributed $425 of your $500 owing. In order to meet the $500 owing you would need to contribute $588 on a pre-tax basis.

  • Will my contributions be calculated differently if I pay them via salary sacrifice?

    Yes. This is because your compulsory member contributions owing are determined on a post-tax basis. Meanwhile, because salary sacrifice contributions are paid from your pre-tax salary, they’re taxed at 15% when they reach your super account. This means the amount you salary sacrifice may not match up to the amount owing.

    For example, if you owe $500 on a post-tax basis and contribute $500 via salary sacrifice, your contribution will have $75 in tax (or 15%) deducted when it reaches your super account. That means you have only contributed $425 of your $500 owing. In order to meet the $500 owing you would need to contribute $588 on a pre-tax basis.

Make a choice regarding your compulsory member contributions

Complete the following form to let us know what you would like to do regarding your compulsory member contributions while you’re stood down.
  • This field is for validation purposes and should be left unchanged.

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