Information on managing and accessing your super through COVID-19

There are many different types of super funds – retail funds, industry funds, corporate or public sector funds, and more – but it’s how the money within the fund is handled that determines if it’s an accumulation fund or a defined benefit fund.

An accumulation fund is a super fund where your retirement benefits depend on the money put in by you and your employer, and the return generated by the fund.

A defined benefit fund is a super fund where the benefits are calculated by a predetermined formula. Unlike an accumulation fund where investments in the fund are subject to fluctuations, market changes in general have limited effect on the value of a defined benefit fund.

Some funds, like Qantas Super, are both accumulation and defined benefit funds.

So how do you know if you’re in a defined benefit fund?

Check your superannuation statement – it will state if you have a defined benefit amount and details. Still unsure? Ring us and ask.

In Qantas Super, Divisions 1, 2, 3, 4, and 15 provide defined benefits.

Learning the lingo

Defined benefits are calculated by a formula. Here are a couple of common terms used in the defined benefit formula that calculates your benefit.

Superannuation salary

The salary amount used by your payroll department to determine how much your employer must contribute to your superannuation fund. It’s based on your ordinary earnings and generally excludes overtime. Depending on your division and your occupation it may also include allowances, loadings, and other benefits.

Final average salary

An average of your superannuation salary over a period of time, for example over the last three years.

Accrual rate

This is a fixed percentage that is used in the formula to calculate your defined benefit, along with your super salary, your age, and the number of years you have been a defined benefit member.

You can learn more about how your defined benefit is calculated by viewing a recent statement online.


Your fund is required by law to detail any fees that are payable. Here are some common ones:

Member fee

May be charged as a monthly amount, but often these fees are paid by the employer or reduced due to discounts based on the size of the plan. You may not be paying any member fees.

Defined benefit fees

Covers the cost of actuarial services and are part of the costs of the fund; they reduce the assets used for investment and don’t generally affect the benefits you receive.

Other fees

Your fund is required to publish investment management fees, insurance fees, and any other fees. Remember some may not affect you as a defined benefit member.

As a member of a defined benefit division of Qantas Super, your employer pays for most of your fees.

Insurance through your super

Your defined benefit fund is likely to offer insurance cover. Types of cover include:

  • Death cover – also known as life insurance
  • Total and permanent disability insurance (TPD)
  • Income protection or salary continuance insurance (SCI)

Generally, your level of cover will be linked to your salary at the time of death or disablement.

You can check your cover online.

Case study: Betty

Here’s an example of how a defined benefit works, using a Qantas Super member.

Betty is in Division 3 and has worked for Qantas for 20 years full-time. Her superannuation salaries in the last three years were $58,000, $60,000, and $63,000.

Betty is retiring next week and also has a Rollover Account of $150,000.

Let’s take a look at the benefit Betty will receive.

Defined benefit formula at retirement =

(Accrual rate x Final Average Salary (FAS) x years of full-time service) + Rollover Account

(18% x $60,333 x 20) + $150,000

$217,199 + $150,000

Total payable to Betty on retirement = $367,199

Components of the formula

Accrual rate: 18%

Final Average Salary (FAS): ($58,000 + $60,000 + $63,000) ÷ 3 = $60,333

Years of full-time service: 20 years

Betty’s Rollover Account: $150,000

Other info you might be interested in

What is insurance through super?

Our ability to earn an income is often the last thing we insure, even though it’s the most fundamental asset we have.

Understanding risk and diversification

Investment risk is the chance that the value of an investment will drop. All investments have risks.

The role of financial planning

Good financial advice can help you set goals and make confident and informed financial decisions, now and in the future.

Learning Hub

Understand your super and the simple steps you can take to stay in control.

We're here to help

If you want to learn more or need help with making a decision about your super, you can get simple advice over the phone or face to face. It’s included as a part of your membership so there’s no extra cost.