The Western Australian (WA) Coal Division of Mine Super is generally for coalminers in WA who are employed by Premier Coal, Carna Coal and the Griffin Coal Mining Company.
You may automatically receive a defined benefit account if you’re employed in the Western Australian coal mining industry and are likely to remain employed as a mine worker for at least six months.
If your work is temporary or casual, you'll receive an accumulation account and this information won't apply to you. Defined benefit accounts have different rules. For instance, they don't allow for extra contributions or let you choose different investment options.
You may also have an accumulation account if you:
Having a defined benefit account means the amount of super you retire with isn’t determined by investment returns. Instead it's worked out using the following formula*:
12% x years of defined benefit membership x benchmark amount.
The benchmark amount, which is $68,313 as at 1 July 2017, is indexed each year with increases in Average Weekly Ordinary Time Earnings. This means your super is largely protected against the effects of inflation.
Your retirement savings increase as your length of membership and the benchmark amount increase.
Once you reach age 65 your membership multiple stops increasing and any further contributions are paid into an accumulation account. When you retire you'll be entitled to a defined benefit calculated using your membership multiple at age 65, times the benchmark amount at the date of retirement.
Your employer contributes between 7% and 10% of the benchmark amount to your defined benefit account. Currently your employer is contributing 8.5% of the benchmark amount.
By law, employers must make Super Guarantee contributions of 9.5% of your salary to your super account. If the defined benefit contribution is less than the Super Guarantee, your employer will pay the extra contribution into an accumulation account with Mine Super or another super fund you choose that's listed in your Award.
You have to pay 3% of the benchmark amount until you turn 65. This contribution is automatically paid from your salary.
The cost of your defined benefit account are built into your employer’s contribution rate.
John has 20 years of defined benefit membership when he retires at age 60. If the benchmark amount when John retires is $68,313, his retirement benefit will be:
Membership multiple = 12% x 20 years = 0.12 x 20 = 2.4
Benchmark amount = $68,313
Retirement benefit = 2.4 x $68,313 = $163,951.20
You automatically receive Death and Total and Permanent Disablement (TPD) insurance with your defined benefit account and you’re covered 24 hours a day, seven days a week.
Generally, you’re TPD if you’re physically or mentally unable to ever work in any occupation you’re reasonably qualified for or suited to as a result of retraining.
If your claim is successful, you’ll receive a lump sum amount using the following formula.
12% for each year of defined benefit membership up to age 60 x the benchmark amount (which is $68,313 as at 1 July 2017).
If you’re seriously incapacitated, but not totally and permanently disabled, you might qualify for a Partial and Permanent Disablement benefit. This is when you’re physically or mentally unable to work in any occupation for which you’re reasonably qualified. This benefit is calculated the same way as for TPD, but based on membership to the date you stopped work.
The cost of this insurance is built into the employer’s contribution rate. Your insurance stops when you leave your employer.