Inbuilt benefits

Death and Disablement benefits are an inbuilt feature of DBD and Accumulation 2 membership (you cannot opt out of these benefits). Benefits are payable for temporary incapacity, disablement, terminal medical condition and death. They are provided (self-insured) by the Fund, not by an external insurance provider.

Am I eligible for inbuilt benefits?

You are eligible for inbuilt Death and Disablement benefits when you join the DBD or Accumulation 2. Your eligibility to receive a death benefit or terminal medical condition benefit ceases when you turn 60.

Your eligibility for a disablement benefit ceases when you turn 65. There is no age limit on eligibility to receive temporary incapacity benefits.

What if I reduce my standard member contributions?

If you are a DBD or Accumulation 2 member and you reduce your standard member contributions under UniSuper’s contribution flexibility arrangements, your inbuilt Disablement benefit will not be affected. However, your inbuilt Death benefit will be lower due to your smaller account balance as a result of your reduced standard member contributions.

If you qualify for half contributions, all inbuilt benefits will be reduced.

Death benefit

Your death benefit is your retirement or resignation benefit as at the date of your death. For Accumulation 2 members this is your account balance.

If you are under age 60 at the time of your death and are eligible, an additional amount that takes into account the number of years until you would have turned 60 is also paid.

Any death benefit from your optional insurance cover would also be payable.

Temporary incapacity and disablement benefit

If you qualify for a temporary incapacity or disablement benefit and have worked full time for the duration of your membership, your monthly benefit will be 60% of your benefit salary multiplied by your average service fraction divided by 12. Periods of part time work or leave without pay during your membership will decrease your monthly benefit.

You may also be entitled to an insured disablement benefit under your optional insurance cover if you are permanently disabled. If you want to make a claim under your optional Disablement insurance cover, you will need to make a separate application as this benefit is externally insured.

Terminal medical condition benefit

If you qualify, you can elect to receive a terminal medical condition benefit.

Your election will be irrevocable. The terminal medical condition benefit is equivalent to your death benefit. Any terminal illness benefit from your optional insurance cover would also be payable.
Are there restrictions on inbuilt Death and Disablement benefits?

Inbuilt benefits will not be payable if you have completed less than three years of contributing service after joining UniSuper or transferring into the DBD or Accumulation 2 from Accumulation 1, and the Trustee considers that your death, disablement or temporary incapacity arose directly or indirectly from a condition which existed at the time of joining or transferring.

If you cease employment with a UniSuper employer and do not recommence active membership of the DBD or Accumulation 2 within 90 days, inbuilt benefits will not be payable if the Trustee considers that your death, disablement, temporary incapacity or terminal illness arose directly or indirectly from a condition which existed at the time of recommencing DBD or Accumulation 2 membership.

Inbuilt benefits if you cease service

If you cease service and are no longer a contributing DBD or Accumulation 2 member, you may be eligible to receive an inbuilt benefit if you die, or suffer disablement, terminal medical condition or temporary incapacity within a period of up to 90 days from the date you ceased service.

The benefit for death, disablement or terminal medical condition will be a lump sum benefit equivalent to the inbuilt death benefit you would have received from your DBD or Accumulation 2 membership if you had died immediately prior to ceasing employment or otherwise ceasing to be a contributing member of the DBD or Accumulation 2, less the withdrawal benefit you were entitled to at that time.

The temporary incapacity benefit will be a monthly income benefit (of benefit salary x 60% x average service fraction divided by 12) calculated as at the date of cessation, payable for up to two years.

Please note, to be eligible for a disablement, temporary incapacity or terminal medical condition benefit you must satisfy the relevant definition in Trust Deed. Employer and member contributions will not be made on your behalf whilst you are in receipt of a disablement or temporary incapacity benefit.

You will not be eligible to receive such a benefit if:

• you commence employment with a UniSuper participating employer or your employment conditions otherwise change and you again become a contributing member of the DBD or Accumulation 2 within the 90-day period,
• you cease to be a UniSuper member within the 90-day period, or
• you are already entitled to receive a disablement, terminal medical condition or temporary incapacity benefit.

You will not be eligible to receive a death, disablement or terminal medical condition benefit if you are aged 60 years or over at the date you cease service.

What is the cost of inbuilt benefits?

If you are a DBD member, the insurance charges for inbuilt benefits are allowed for in the formula – no deductions are made from your contributions or your final benefit.

If you are an Accumulation 2 member, the insurance charge for the inbuilt benefits is deducted from your account each month.

The insurance charge for the inbuilt benefits is equivalent to $9.24* per $1,000 of salary upon which your employer contributions are calculated. If you qualify for half contributions, your inbuilt benefits will be half of the full amount and the cost will be $4.62* per $1,000 of salary upon which your employer contributions are calculated.

* These rates include an administration fee to cover the costs of administering the inbuilt benefit arrangement.

What happens if I take a Flexi Pension under the transition to retirement rules?

If you purchase a Flexi Pension under the transition to retirement (TTR) rules and reduce your working hours, this may reduce the amount of inbuilt Death and Disablement benefits you may be entitled to.

If you have inbuilt Death and Disablement benefits as part of your DBD or Accumulation 2 membership:

• Disablement benefits stop at age 65; and
• Death benefits stop at age 60.

For more details see transition to retirement.