NTEU Advice on UniSuper Issues
Please find below NTEU's advice on the issues surrounding UniSuper that have been covered in the media this week.
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(193 KB) - PDF
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Phone: 02 9351 2827
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nteu@nteu.usyd.edu.au
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Michael Thomson
Branch President
mthomson@mail.usyd.edu.au
Andrew Rivett
Branch Organiser
arivett@nteu.org.au
Katherine Barnsley
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kbarnsley@nteu.org.au
Comments
[ +4 ] Thoser in the Defined Benefit did not share in the profits of the good times like those in Flexi fund so it is unfair and possibly discriminatory to ask them to share in the bad times.
Like • Dislike • Report Abuse[ 0 ] Have a look at the other side of the coin....currently a real problem in Canada
Like • Dislike • Report Abusehttp://www.universityworldnews.com/article.php?story=20120118202804520
[ +4 ] Like several of the previous correspondents I too have an Accumulation Fund as well as a DBF and have received the same silly letters assuring me that as I am in the Accumulation Fund I don't have to worry. The most annoying this is that a letter I was sent on 8 January 2012 advises me that they have noticied I actually have two accounts--the Accumulation 1 account and the DBF. They advise me that to save me extra management costs they have rolled over my A1 account into my DBF!!! Under whose authority? Not only this, the letter advises me that this happened in July 2011 (they backdated it?) I will be following this up with them.
Like • Dislike • Report Abuse[ +4 ] I recently wrote to UniSuper requesting clarification of the statement that there was a chance defined benefits could be reduced on a fair and equitable basis in the future. In particular, I asked them to “...supply me with (i) the principles that you intend to use when deciding how the benefits will be reduced, and (ii) examples of how these principles will actually be applied in practice”. Instead of receiving answers to these specific questions, I was sent a form letter that included (amongst a whole lot of other information that I had not requested) the following:
Like • Dislike • Report Abuse“If benefit reductions were made, recent media coverage said they needed to be “fair and equitable”. What does this mean and will I be impacted?
• It’s important to note that no decision has been taken to reduce member benefits under Clause 34. As we advised in our recent letter to members, the Trustee expects that any such decision, if required, is some time away – most likely the first quarter of 2013.
• If any reductions were decided to be necessary, the DBD trustee would impartially decide, with actuarial and legal advice, which defined benefits should be reduced and how they should be reduced, to ensure that any reductions are fairly applied across all benefits being funded from the DBD.
• Any reduction could include benefits for members still in active employment, and benefits that are currently being paid out, including pensions.”
This response has done nothing to restore my shattered confidence in UniSuper’s management and administration. Ironically, the same form letter contained the statement that UniSuper is “... committed to providing you with honest and transparent communication...”
I fail to see why UniSuper has not provided me with at least tentative answers my questions. Surely it is possible to set out relevant actuarial and legal principles that are likely to apply in the advent of the problems with the DBD then to show via examples how these might be applied.
Am I alone in feeling like a mushroom?
[ +4 ] Graeme, thanks for your info re representation at the Feb 9 meeting. Like Ric, many members feel misled by the terminology of DBP. Prior to the closure of the DB pension plan in 1998 to new members, there was no disclosure of any risk to the employee. Although it was 'available', the Trust Deed was not normal reading of members, and no disclosure of risks was made by employers that I can find. I have asked Unisuper for a copy of the Trust Deed applicable at the time I joined but have been unsuccesful to date - being sent only deed amendments, not the deed itself.
Like • Dislike • Report AbuseWhen a similar scheme, the CSS (Commonwealth public servants) was closed to new members, its' funding was then guaranteed, and this should have occurred with the DivA/B plan also.
[ +6 ] The Financial Times Lexicon provides the following explanation of a Defined Benefit Plan.
Like • Dislike • Report Abuse“A retirement plan sponsored by an employer in which an employee receives a fixed recurring payment, or benefit, during retirement. The amount of that payment is determined by a formula based on salary history and years of service at the company. In such a plan, the employer assumes all the investment risk and determines investment choices and must pay the employee the defined benefit regardless of the investment performance.”
The final sentence is of course particularly relevant in the UniSuper case. I would imagine that this definition is typical of general community understanding of the essential nature of Defined Benefit’s schemes.
Despite the changes introduced in 2006, UniSuper continues to describe and advertise its scheme as a Defined Benefits plan. At best, this is highly misleading.
Why has UniSuper management done nothing to change the title in order to accurately reflect the true nature of the scheme?
[ +6 ] The Financial Times Lexicon provides the following explanation of a Defined Benefit Plan.
Like • Dislike • Report Abuse“A retirement plan sponsored by an employer in which an employee receives a fixed recurring payment, or benefit, during retirement. The amount of that payment is determined by a formula based on salary history and years of service at the company. In such a plan, the employer assumes all the investment risk and determines investment choices and must pay the employee the defined benefit regardless of the investment performance.”
The final sentence is of course particularly relevant in the UniSuper case. I would imagine that this definition is typical of general community understanding of the essential nature of Defined Benefit’s schemes.
Despite the changes introduced in 2006, UniSuper continues to describe and advertise its scheme as a Defined Benefits plan. At best, this is highly misleading.
Why has UniSuper management done nothing to change the title in order to accurately reflect the true nature of the scheme?
[ +3 ] Retired university staff can rely upon NTEU to represent their interests in future negotiations with the Unisuper Board and the two organisations representing the universities as employers. A number of the more recent comments seem to wrongly assume that the views of the Union are consonant with those of the Unisuper management and organisation. The advice circulated by me in the second last week of December was designed to clearly set out the scale and scope of the current (limited)
Like • Dislike • Report Abuseactuarial shortfall in the two defined benefit schemes and to criticise the 2006 decision to leave the Board with only one option (cutting member benefits) if the shortfall persists.
A meeting of the Board, NTEU and the employers is now scheduled for February 9 next year and we will be vigorously pursuing the agenda set out in my earlier advice for both current and retired members of the defined benefit schemes. A retired former Unisuper Director and current DBD pensioner will be part of the NTEU team. I agree that is surprising and disappointing that DBD members who also have accumulation accounts (the big majority) have received advice that they are not affected.
I will keep this blog post regularly updated as new information comes to hand. Thanks for continuing feedback and hope you all enjoy the festive break.
[ +1 ] LIke Peter C I too am retired and dependent on the DBD pension and was astonished to receive the letter from Mr McCredden, CEO of UniSuper, stating that "you are not affected by Clause 34, because you are a member of UniSuper's Accumulation Division." Yes, I still have money invested in the AD too but can't his automatic maimerge system work out I am also in the DBD? This is an insult to our intelligence. If UniSuper can't even get this right how much can we depend on their assurances, repeated by Grahame McCulloch? I can see that the retired members are going to cop a cut to save what's left of the DBD. And I endorse Peter C's question: What representation can retired NTEU members expect from their former union?
Like • Dislike • Report Abuse[ +4 ] Today's mail has just produced a corker from Terry McCredden (CEO Unisuper). Although I am in current reciept of a DBD pension, and have a very small Accumlation 2 account from occasional casual work. In Mr McCredden's letter he assures me, in bold print, that "you are not affected by Clause 34'. Later he tells me I am not a DBD member, but I might be interested in how it affects my colleagues.
Like • Dislike • Report AbuseHe doesn't seem to understand the basics of his own organisation, and has assumed because I have a few hundred dollars in an accumulation account, that I am not affected by the potential of Clause 34. My member number is the same for both accounts.