Super changes

Significant Event Notice - July 2019

On 1 July 2019, new laws come into effect to help protect members’ super balances from being eroded by fees. These changes apply to most super funds and include:

  • transfer of low super balances (less than $6,000) to the Australian Tax Office (ATO), where there has been no relevant activity for 16 months. To keep your low super balance from being transferred to the ATO, complete the Inactive Low-Balance Account Declaration form (PDF);
  • cancellation of insurance cover for members whose super balances have had no relevant activity for 16 months. To retain your current level of insurance cover, you can download the Keep your insurance cover form (PDF)
  • capping of fees for members with low balances to 3%.

Further details of these changes will be available at a later stage.

Other changes to be aware of

In addition to the regulatory changes outlined above, we’re also making some changes to our product offering from 1 July 2019, including:

  • changes to insurance premiums (our first premium increase in five years), and to insurance terms and conditions;
  • changes to the structure of the administration fee;
  • changes to the fee we charge for financial advice - although, in most cases superannuation advice continues to be offered at no extra cost for our members;
  • changes to rules relating to partial transfers and withdrawals from VicSuper
What’s changing?
  • Changes to fees

    What are the changes?

    Change to the administration fee structure - from 1 July 2019, if your account balance is under $4,300 there will be a change to how we apply administration fees to your account balance.

    Administration fees - FutureSaver 

    Current Structure

    New structure from 1 July 2019

    For all accounts:

    • Account-keeping fee: $1.50 per week; plus
    • Administration fee: 0.19%pa

    If your account balance is under $4,300:

    • Account-keeping fee: $0; plus
    • Administration fee: 2% pa

     If your account balance is $4,300 or more:

    • Account-keeping fee: $1.50 per week; plus
    • Administration fee: 0.19% pa

    Please note that fees are calculated monthly, so the administration fee you are charged may change, depending on your account balance at that time.

     

    Advice fee changes

    VicSuper provides members with quality super advice to help them plan for their future. While most of our advice is at no additional cost, an advice fee is charged for certain types of personal super advice.

    From 1 July 2019, this advice fee will increase to $300 (including GST). All our financial planners are salaried VicSuper employees and we don’t pay commissions to our financial planners.

    For details about the types of advice that are charged fees, please visit vicsuper.com.au/advice

    Do I need to do anything?

    These fee changes will apply automatically from 1 July 2019. You do not need to do anything.

  • Changes to your insurance cover

    Who's affected?

    All VicSuper members who hold insurance cover through their VicSuper account.

    What are the changes?

    Changes to insurance premiums - on 1 July 2019, the cost of insurance cover will change:

    • Death only premiums will decrease by 3.6%
    • Death and total & permanent disability (TPD) premiums will increase between 4.5% and 20%, depending on your age, occupation category, and cover type.
    • Income protection premiums will increase by 13.1%.

    This is the first premium increase since 2014 and we work hard to keep any increases to a minimum. This insurance premium increase is due to the effect of the new ‘Protecting your Super’ legislation, improvements in our policy (as detailed below), as well as increases in the number of claims paid out to members or their dependants. Because we’re a profit-to-member fund, we don’t pay profits or dividends to shareholders.This means you only pay for what it costs us to provide you with insurance.

    Unit-based cover

    Please refer to the premium table below to compare the premium rates applicable to unit-based cover currently and the rates that will apply from 1 July 2019. While the premiums will change on 1 July 2019, the dollar value of unit-based cover at each age bracket is not changing. Most members who join through their employer have 6 units of default Death and TPD cover. The cost of each unit of default Death and TPD cover is currently 84 cents ($0.84) per week. This means the cost of 6 units of default Death and TPD cover is $5.04 per week.

    On 1 July 2019, the cost of default Death and TPD cover will increase to $5.82 per week (6 units x $0.97).

     

         Current  From 1 July 2019
        Cost per unit of cover per week Cost per unit of cover per week

     

    General

     

     

    Death

    Death&TPD

     

    $0.35

    $0.84

     

    $0.34

    $0.97

     

     White Collar

     

     

    Death

    Death&TPD

     

    $0.28

    $0.67

     

    $0.27

    $0.78

     

    Professional

     

     

    Death

    Death&TPD

     

    $0.20

    $0.47

     

    $0.19

    $0.55

     

    Own Occupation*

     

     

    Death

    Death&TPD

     

    $0.35

    $0.92

     

    $0.34

    $1.07

     

     

    Fixed cover

    If you elected to have fixed cover, the cost will vary based on your age, occupation category and level of cover chosen. To find out the cost of fixed death only and death and TPD cover from 1 July 2019, refer to the section, How to calculate my insurance premiums below. To find out your current level of cover, please login to MembersOnline or refer to your recent half-yearly statement.

    Income protection

    Most members who join through their employer have 6 units of default Income protection cover with 2 years of waiting period and 90 days of benefit periods. To find out the cost of income protection cover from 1 July 2019, refer to the section,How to calculate my insurance premiums below. To find out your current level of cover, please login to MembersOnline or refer to your recent half-yearly statement.

    How to calculate my insurance premiums (download PDF)

    Enhancements to our insurance policy

    We’ve amended a few of the current exclusions in the insurance policy to make this product even better for our members.

    Effective 1 July 2019:

    • the Criminal detention exclusion will no longer apply.
    • a Terrorism exclusion will be introduced to the insurance policy.This means a benefit won’t be payable where death or disablement occur because of participation in a terrorist act. However, while in the past a victim of a terrorist act may not have received a benefit, they will now qualify.
    • the Acts of War exclusion (Death and TPD cover only) will no longer apply unless the member is overseas actively participating in a war, other than for the Australian Defence Force.
    • the Pregnancy and childbirth exclusion (Income protection only) will be amended so that a miscarriage under an uncomplicated pregnancy will no longer be excluded provided the miscarriage results in disability for at least 90 consecutive days.

    Reinstatement of insurance cover

    From 1 July 2019, if your insurance is cancelled you can reinstate your insurance cover within three months of your cover ceasing subject to the following:

    • If your cover ceases due to insufficient funds to meet your monthly premium payments, you ensure that at the end of the three months commencing from when your cover initially ceased, you have enough funds in your account to cover all premiums due.
      Important: If you suffer death, terminal illness or TPD after your cover ceases and before you have sufficient funds in your account to recommence your cover, you won’t be eligible for a claim
    • If your cover is cancelled due to inactivity (a continuous period of 16 months during which a contribution hasn’t been received in your account), your cover will be reinstated from the date of your request made in the Reinstate your insurance cover (form available from 1 July 2019) and approved by us.

    Approval to reinstate cover is subject to the terms and conditions of the policy.

    Do I need to do anything?

    These changes are automatic and will take effect on 1 July 2019. As always, you should consider if your VicSuper insurance is still appropriate for your financial circumstances and whether or not you’d like to maintain or amend your insurance cover.

  • Changes to minimum balances for partial rollouts and withdrawals

    Who's affected?

    Members who are requesting a partial transfer out or a partial withdrawal from their member account.

    What are the changes?

    From 1 July 2019, when you request a partial transfer or withdrawal from your account, a minimum balance needs to remain in the account:

    • For partial transfers to another complying super fund, the minimum balance is $6,000.
    • For partial transfers to another VicSuper account, the minimum balance is $7,000.
    • For partial withdrawals, the minimum balance is $7,000.

    Full transfers or withdrawals aren’t affected.

    Do I need to do anything?

    These minimums will apply automatically from 1 July 2019. You don’t need to do anything.

All changes will be reflected in the VicSuper FutureSaver Product Disclosure Statement from 1 July 2019.

This Significant Event Notice has been prepared without taking into account your objectives, financial situation or needs. You should therefore consider the appropriateness of the Significant Event Notice in light of your individual circumstances before acting on the advice. You should also obtain and consider a copy of the relevant Product Disclosure Statement available at www.vicsuper.com.au before making any decisions. VicSuper Pty Ltd ABN 69 087 619 412, AFSL 237333, Trustee of Victorian Superannuation Fund ABN 85 977 964 496.