You'll automatically receive a Western Australian (WA) Coal Division Defined Benefit if you’re employed in the WA coal mining industry and are likely to remain employed as a mine worker for at least six months. Along with your defined benefit, you might also receive an accumulation account.
If your work is temporary or casual, you'll only 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. If you want to know more about your accumulation account, read our Super Product Disclosure Statement.
Having a defined benefit account means the retirement savings you receive from your defined benefit isn’t determined by investment returns. Instead it's worked out using the following formula*:
Your retirement benefit = membership x benchmark amount.
The benchmark amount is indexed each year with increases in Average Weekly Ordinary Time Earnings. This means your super is largely protected against the effects of inflation. If you want to know the current benchmark amount, read the Mine Super WA Coal Division PDS.
Your membership multiple is each year you worked for your employer before turning 65 multiplied by 12%.
Your retirement savings increase as your length of membership and the benchmark amount increase. If you worked part-time in a year, your multiple will be pro-rated. For example, if you worked half of full-time hours for one year, it will be 0.5. When you reach age 65, your membership multiple stops increasing and you and your employer stop contributing.
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 retirement benefit calculated using your membership multiple at age 65, times the benchmark amount at the date of retirement. If you have an accumulation account, this will also be included in your retirement benefit.
Your employer contributes between 7% and 10% of the benchmark amount to your defined benefit account. Currently your employer is contributing 7% 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 $50,000*, his retirement benefit will be:
Membership multiple = 12% x 20 years = 0.12 x 20 = 2.4
Benchmark amount = $50,000
Retirement benefit = 2.4 x $50,000 = $120,000
*This amount is an example used for illustrative purposes. The current benchmark amount can be found in the WA Coal Product Disclosure Statement.
If you have an active WA Coal Division Defined Benefit, you’re eligible for a benefit if you die or become disabled while you’re working for your employer.
This benefit is calculated as a retirement benefit at the age of 60, using the benchmark amount that applies at the date of death or disablement.