Defined Benefit Division

Find out what you’re entitled to as a UniSuper Defined Benefit member.

Defined Benefit Division membership offers you

• Choices in your style of super
• Two super components - defined benefit and accumulation
• Employer, member and voluntary contributions
• Investment choice for your accumulation component
• Benefits on retirement, resignation, death, disablement, illness and injury
• Access to a low-cost UniSuper Flexi or Indexed Pension when you retire
• Low fees and charges

Choices for your super

Your benefits and super choices depend on your UniSuper membership category which is determined by your employer and set out in your employment agreement.

You'll initially be enrolled in UniSuper's Defined Benefit Division. You then have 12 months to choose your style of super and decide if you'd rather stay in the Defined Benefit Division or transfer to Accumulation 2.

Your two super components

Your account in the Defined Benefit Division is made up of two components:

1. The value of your defined benefit component of your account is determined by a formula based on your age, salary, period of service and contribution levels. This part of your benefit is usually not affected by investment market performance.
2. Most members also have an accumulation component the value of which is affected by market performance.

Contributions

Employer contributions up to 17% of your salary are made to your account - 14% goes toward your defined benefit and the remaining 3% (if applicable) is paid into your accumulation component.

Member contributions at a standard rate of 7% of your salary are made to your defined benefit component.

You may reduce your level of member contributions if you need to. But beware - this is a decision that will affect the amount of money you have to live on in retirement and you may lose valuable insurance cover.

Additional voluntary member contributions can also be made by regular payroll deductions, BPAY, lump sum payments or rollovers from other super funds. Many employers also allow you to make contributions from your before-tax pay.

For more information see the fact sheets

• Contribution flexibility for members receiving 17% employer contributions
• Contribution flexibility for members receiving 14% employer contributions

Investment choice

• Defined Benefit component
  You can't choose how your defined benefit component is invested. All defined benefit contributions are pooled together and invested by UniSuper. Because your benefit is based on a formula, investment returns won't generally affect how much you receive, except in long term market downfalls.
• Accumulation component
  You can choose how the contributions to your accumulation component are invested. This component of your benefit will be affected by investment market performance.

Insurance cover

Inbuilt (compulsory) insurance cover is a feature of your Defined Benefit Division membership. You can also take out additional optional insurance cover if required.

Your compulsory cover

It starts when you join the Defined Benefit Division and stops when you are no longer a member of this plan. Importantly:

• When you turn 65 you will no longer be covered for total and permanent disablement.
• Your death cover will stop when you turn 60.

All compulsory insurance cover stops at age 65.

Your compulsory insurance also includes cover for temporary incapacity, in the event that you become injured or ill temporarily and cannot work for over three months, and you meet the definition of temporary incapacity.

The cost of compulsory insurance cover is built into your defined benefit formula.

If you reduce your member contributions under contribution flexibility you'll still be covered by our compulsory Death and Disablement insurance. However, a reduction in your member contributions will reduce your resignation benefit and, effectively, your death benefit.

For more details about your insurance options as a Defined Benefit Division member, please download our Product Disclosure Statement.

Your optional cover

When you join UniSuper, you receive:

• One unit of optional Death and Permanent Disablement cover if you are under age 60.
• One unit of Death-only cover if you are age 60 to 64.

Up to age 65, you can also apply for additional units of insurance cover or opt out of it altogether.

Optional Death and Disablement insurance cover costs $1.40 per unit per week. Optional Death-only cover costs 90 cents per unit per week. The premiums are deducted from the accumulation component of your account on a monthly basis.

It's important to remember that if you reduce your member contributions under contribution flexibility, you will no longer be eligible for optional insurance cover, nor will you be eligible to purchase optional insurance if you decide to start voluntary contributions at a later date.

Resignation and retirement benefits

If you resign or retire you receive benefits made up of two components:

• The defined benefit component is calculated as benefit salary x years of service x Lump Sum Factor x Average Service Fraction x Average Contribution Factor.
• The accumulation component is made up of your 3% employer contributions (if any), voluntary contributions and rollovers, investment returns, less fees and taxes.

Transition to retirement benefits

Transition to retirement is a government policy that lets you take some or all of your superannuation as a pension while you're still working.

As a Defined Benefit Division member you may purchase your pension using part or all of your defined benefit component and/or your accumulation component.

Once you have used part or all of your defined benefit component, you stop being a Defined Benefit Division member. Any residual defined benefit funds will be transferred to an Accumulation 2 account. All future employer and member contributions will also be made to this account.

You will retain your compulsory UniSuper death and disablement cover but the premiums will be deducted from your Accumulation 2 account. If you reduce your hours your insurance cover will also be reduced on a pro-rata basis.

If you use only your accumulation component to purchase your pension you will remain a Defined Benefit Division member and you'll retain all your normal entitlements.

For more information Transition to Retirement.

Death benefits

If you are 60 or over when you die

Your entire death benefit will be the amount you would have received if you had resigned or retired as well as any optional insurance cover you have.

If you are under 60 when you die

You will receive your normal resignation/retirement benefit plus an amount from your compulsory insurance that covers the number of years remaining until you would have turned 60. You will also receive any optional insurance cover you have.

Permanent disablement benefits

If you meet the definition of permanent disablement in the Trust Deed and/or insurance policy, you may receive:

• A benefit from your compulsory cover which is paid as a monthly income benefit to age 65
• A benefit from any optional insurance cover that you have

For more information on this benefit and how it is calculated, download the fact sheet – Disablement benefits for Defined Benefit Division or Accumulation 2 members

Temporary incapacity benefits

If you become injured or ill and are unable to work for over three months – and you meet the eligibility criteria – you will receive a monthly income benefit for up to two years.

Download the fact sheet – Temporary incapacity benefit for Defined Benefit Division or Accumulation 2 members for more information.

Tax and your super

Superannuation is subject to government taxes, usually at concessional rates.

Fees

You'll save on fees and charges through UniSuper’s economies of scale.