Significant Event Notice – 1 February 2020

Download PDF version


Like many other super funds, recently introduced and upcoming Government legislation, combined with our claims experience and enhancements to our insurance policy, has meant we have had to make changes to the insurance we offer to our members. This notice includes all changes which came into effect on 1 April 2020.

These include:

  1. changes to the eligibility for default cover
  2. changes to insurance premiums
  3. enhancements to our insurance policy

We encourage you to read the following information to see what this may mean for you.


Insurance through super

If you joined VicSuper through your employer, you would have automatically received default insurance cover subject to satisfaction of all eligibility criteria. This insurance cover was granted to you without any underwriting or assessment of your individual circumstances. Your insurance premiums are paid from your VicSuper account on a monthly basis.

While insurance is important to provide financial protection, it may not be as relevant for everyone, particularly younger members. Insurance through super can be a very important and cost effective benefit, however because it will erode some of your retirement savings it is important that you consider whether your current level of cover is right for you. It is also important to note that this cover is subject to the terms and conditions of the insurance policy. Refer to VicSuper’s Insurance Handbook for more details.


What’s changing?
  • Changes to the eligibility for default cover

    Who’s affected?

    All VicSuper members with default insurance whose account balance in their VicSuper account has not been $6,000 or more from 1 November 2019 or, from 1 July 2019, those who are inactive.


    What is changing?

    In 2019, the Federal Government introduced two new laws that aimed to help protect members of superannuation funds from having their retirement savings eroded by insurance premiums. These laws are the Protecting Your Super (PYS) legislation, introduced on 1 July 2019, and the Putting Members’ Interests First (PMIF) legislation, which will commence on 1 April 2020. Changes to the eligibility for default cover are as follows:

    Account balance less than $6,000 (low account balance)

    If your account has not had a balance of at least $6,000 between 1 November 2019 and 31 March 2020, your insurance cover will be cancelled on 1 April 2020, unless you opt-in to keep your insurance cover prior to this date.

    Reminder – No contributions for 16 months (inactive account)

    VicSuper is required to cancel your insurance cover if you have not received any contributions into your VicSuper account for a continuous period of 16 months, unless you opt-in to keep your cover.We’ll write to you if your VicSuper account has not received any contributions after 9, 12 and 15 months to help you decide if you wish to continue with your cover.


    How do I keep my insurance?

    If you wish to keep your VicSuper insurance cover, simply submit your election online via your VicSuper MembersOnline account or download and complete the Keep your insurance cover form.

    An election to keep insurance cover even if an account becomes inactive is considered to be a valid election to keep insurance cover even if the account has a low balance and vice versa. This means that if you have already made an election to keep your cover under either of the above criteria you don’t need to do it again.

    What happens if my cover is cancelled? If your cover is cancelled on 1 April 2020 due to a low balance, you can request to have your cover reinstated under limited circumstances. Conditions apply.


  • Changes to insurance premiums

    Who’s affected?

    All members who hold insurance cover through their VicSuper account.


    What is changing?

    The new legislation will reduce the number of members who will have automatic default cover. This means there’ll be fewer insured members to share the cost of cover, ultimately increasing the cost of cover.

    Along with the introduction of the new legislation, this insurance premium increase is also due to improvements to our policy (as detailed below), and the number of claims paid to members or their dependants.

    We always work with our group life insurer to negotiate bulk insurance rates for our members. 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

    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 April 2020.

    While the premiums will change on 1 April 2020, the dollar value of unit-based cover (i.e. the amount of insurance cover) at each age bracket is not changing.


    Occupation Category
    Current
    Cost per unit of cover per week
    From 1 April 2020
    Cost per unit of cover per week
    General Death
    Death & TPD
    $0.34
    $0.97
    $0.34
    $1.17
    White Collar Death
    Death & TPD
    $0.27
    $0.78
    $0.28
    $0.94
    Professional Death
    Death & TPD
    $0.19
    $0.55
    $0.20
    $0.66
    Own Occupation* Death
    Death & TPD
    $0.34
    $1.07
    $0.34
    $1.31
    * applicable to own occupation cover granted prior to 1 July 2014. The premiums shown have been rounded to two decimal places for simplicity.


    Income protection

    From 1 April 2020, income protection premiums will increase between 19.83% and 20.13%. The cost will vary based on your age, occupation category and level of cover chosen.

    To find out the cost of income protection cover from 1 April 2020, please refer to How to calculate my insurance premiums (PDF 198kb)

    Fixed cover

    If you elected to have fixed cover, the cost will vary based on your age, occupation category and level of cover chosen. On 1 April 2020, the cost of insurance cover will change depending on your age, occupation category, and cover type:

    • Death and Total & Permanent Disability (TPD) premiums will increase between 10.5% and 23.8%
    • Death only premiums will increase by 2%

    To find out the cost of fixed death only and death and TPD cover from 1 April 2020, please refer to How to calculate my insurance premiums (PDF 198kb)

    To find out your current level of cover, please refer to your half-yearly statement or login to MembersOnline.


    Do I need to do anything?

    These changes are automatic and will take effect on 1 April 2020. 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, amend or cancel your insurance cover.

  • Enhancements to our insurance policy

    Who’s affected?

    All members who hold insurance cover through their VicSuper account.

    What is changing?

    VicSuper has made some important changes to its insurance policy that could lead to better outcomes for our members.

    Income protection cover
    • Effective 1 April 2020, you’ll be eligible for income protection benefit even if you are working less than 14 hours a week, provided your date of disablement is on or after 1 April 2020 and you are aged between 14 and 65 years, a VicSuper member, legally permitted to reside and work in Australia, and are actually employed (including self-employed).
    • If your date of disablement occurs in a period in which you are not working and you have a formalised agreement to commence employment on a future date, you’ll be considered employed and eligible to make a claim.
    • Currently, any superannuation contribution benefit you receive as part of your income protection disability benefit ceases if you become unemployed. From 1 April 2020, the superannuation contribution benefit will no longer cease if you become unemployed.

    Changes to life events cover
    • We currently offer you the ability to increase your cover with minimal underwriting when you have a significant life event such as marriage, birth/adoption of a child or taking out a mortgage for the initial purchase of a primary residence. This is called life events cover. From 1 April 2020, you can apply for life events cover within 6 months of the event occurring. This was previously 2 months. You can learn more about life events cover in our Insurance Handbook (PDF 2.5mb)
    • If you have received life events cover due to a marriage or registration of a de facto relationship, then you cannot apply again for the life event at the first anniversary of these events.
    • If you have received life events cover due to a divorce or registration of a separation from a marriage or de facto relationship, then you cannot apply again for the life event at the first anniversary of these events.

    All changes will be reflected in the VicSuper FutureSaver Product Disclosure Statement and Insurance Handbook from 1 April 2020.

    Do I need to do anything?

    You are not required to take any action for the above policy enhancements. These changes are automatic and will take effect on 1 April 2020.

Looking for previous Super changes?
Got any questions?

Don't sit there wondering - our team members are here to help!