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News about UniSuper's Defined Benefits Fund

Posted 14 December 2011 by Jeannie Rea (NTEU National Office)

NTEU views the news about UniSuper's Defined Benefits Fund with serious concern.

Following further investigation and consideration we will be issuing a statement to all members in the next couple of days.


Yours faithfully,

Jeannie Rea, National President 

Grahame McCulloch, General Secretary

Matthew McGowan, National Assistant Secretary

 

Comments

  1. David said on 19:18 Monday 4 Feb, 2013

    [ +2 ] It would seem to me that if our benefits are reduced we should be able to sue someone for allowing the change to happen

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  2. ysbasil said on 0:26 Friday 16 Mar, 2012

    [ +4 ] 2005, I read the letter with regards to the define benefits. I brought it to Nteu attention because the fact that they were removing a protection clause. For nothing in return. I was told to contact HR, our unisuper person was on holidays. Tried to contact Unisuper they took my name and they would contact me. In a blink of an eye it was done. Who allows a clause to be removed to protect a benefit in the likehood of a fund not being able to meet its commitment and not have it replaced with a similiar clause a one that is better. I never got any information back from unisuper. When you have foxes looking after hen houses this is what you expect to happen. By my recollection even if the members voted 100% against and 99% of the universities said no. The 1% had veto rights to the vote and it would of passed. This is not a democratic vote.

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  3. Molly said on 21:26 Tuesday 20 Dec, 2011

    [ +2 ] This is taken from the UWA Financial Report 2006
    "Clause 34 of the UniSuper Trust Deed outlines the process UniSuper must undertake (including employer notifications and notice
    periods) in order to request additional contributions from employers if the UniSuper assets are considered by the Trustee to be
    insufficient to provide benefits payable under the Deed. At least four years notice that such a request may be made is required. If such a
    request was agreed to by employers then members must also contribute additional contributions equal to one-half of the rate at which
    their employer is prepared to contribute. If the employers do not agree to increase contributions the Trustee must reduce benefits on a
    fair and equitable basis. The Trustee notified employers during 2003 that such a request may be made in the future but it considered this
    was unlikely at that time."

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  4. Alan said on 19:10 Monday 19 Dec, 2011

    [ -5 ] The worst thing would be a plethora of early retirements now with all DB early retirees drawing down their monies as lump sums. That would be equivalent to a bank run. UniSuper needs to say by how much the DBs will be reduced in a worst case scenario - eg., 10% for example. A persisting rumour mill would kill the fund. I also think we need to work constructively with UniSuper to fix this problem and accept that we may have to make small sacrifices to keep most of our benefits. An adverserial approach to a problem that is obvious would be like putting nails in our own coffin. Who in their right minds could believe that our DBF wouldn't be affected by the current global financial problems. Surely we had to realise that one day the world debt can would be kicked up against a brick wall - nothing left to lend and no-one other than China left to borrow from. So many countries, companies and even some universities are geared to the hilt and interestingly China doesn't want to lend.

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  5. Tom said on 0:17 Sunday 18 Dec, 2011

    [ 0 ] I'm a defined benefit pensioner and would make a couple of points:
    First I've been looking at definitions of "defined benefit" and all I have so far seen indicate the employer makes up any shortfall.
    Second, Unisuper's submission to the superannuation system review does use phrases like "collective pension." Yet Unisuper still markets it as a Defined Benefit.
    Third, I gather there are no provisions to require Unisuper to review any benefit reductions made to see if they can be fully or partially restored.Certainly as a matter of fairness there should be a requirement that any benefit cuts be reviewed to see if they can be restored.
    Finally, a cynic might see McCredden's circular letter to defined benefit members as an attempt to induce them to exit the fund. If what I have read is correct there are only about 6000 pensioners, and Unisuper has for some years been attempting to induce members to leave the defined benefit.

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  6. Leo said on 18:25 Friday 16 Dec, 2011

    [ +1 ] I think the NTEU should ask UniSuper for a copy of the Clause 34 wording before the 2006 change and then post it on their website. Members can then make an informed decision as to whether the change was benign or whether they've been duped. Maybe some proper legal analysis of the wording of Pre 2006 Clause 34 as to its efficacy, might help as well.

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  7. Leo said on 17:51 Friday 16 Dec, 2011

    [ -12 ] Thanks Phillipa Rothfield. I'm glad some members are taking the time and effort to understand how the DB works and seen through the alarmist clap trap from the ABC

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  8. Philipa Rothfield said on 17:40 Friday 16 Dec, 2011

    [ -3 ] I wasn't surprised that Unisuper activated its clause (34?) to see whether there is enough $$ in the coffers to cover defined benefit obligations. I found the NTEU email (15th December) very helpful in setting out some of the Unisuper processes but most especially in its feedback as to where we are in relation to the fund's ABI and VBI. The reason I wasnt surprised that the fund is watching its ability to pay DB pensions is that so many investments have dipped out in recent months or longer. It is very helpful to see the current state of affairs. The discussion of the distinction between VBI and ABI enabled me to see how Unisuper has a "fire sale" measure and another measure to monitor overall financial health in relation to the defined benefit pension plan. And also, to note that the ABI is at 98%. The difficulty for any finanical body is that, on the one hand, defined benefit pensions are formulaic, on the other, the money to pay these pensions depends on investment returns. I found it interesting to see how many people we are talking about also. So, thanks for the informative email. Unless we all resign at once, like the nurses, I feel OK about where we are financially, subject to the global financial situation. Blame capitalism.

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  9. John Wood said on 2:12 Thursday 15 Dec, 2011

    [ +6 ] There is a fundamental issue that UniSuper should address here. Employees who receive 17% employer superannuation are automatically defaulted into defined benefit and only have 1 year to opt out into Accumulation. If they miss the 1 year window they are stuck in defined benefit and it is all so inflexible and draconian. There is no opt out form in the Product Disclosure Document and members have to chase the form from UniSuper after they have been defaulted. It's all too difficult for the average person on the campus and this process could be seen as defined benefit bias by the Trustee. Is it in the best interests of members to have a Product Disclosure Document without the necessary opt out form? University employees all around Australia should also have choice of fund and I would love Jeannie Rea to pursue the choice issue and the disclosure issue for all of our comrades here. This is our retirement income, yet we are not calling the shots and every employee deserves a true choice. Amen!

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  10. YSL said on 2:05 Thursday 15 Dec, 2011

    [ +6 ] Did the NTEU alert its members in 2006 when the trust deed was changed and the implications of the change? When did the NTEU first know about the change? - before or after it happened? If it knew it was coming, did it call for a discussion involving its members? These are factual questions. I do not want to make any judgements before knowing the answers. Can the NTEU please answer them.

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