members
DBD and the investment markets
For almost three decades, UniSuper’s Defined Benefit Division (DBD) has successfully helped members prepare, plan for and comfortably finance their retirement.
Designed for members
All contributions to the DBD (by both employers and members) are pooled together and invested by UniSuper in a diverse portfolio of shares, property, bonds and cash - similar to UniSuper’s Balanced investment option.
As a DBD member, your final benefit is determined by a formula that takes into account your age, length of service, contribution levels, employment status and final salary. You can read more about how your benefit formula works in the Super for Defined Benefit Division and Accumulation 2 members Product Disclosure Statement.
How is the DBD affected by investment performance?
As explained above, the pool of assets in the DBD are invested in a diverse portfolio of shares, property, bonds and cash.
A range of events since 2008 have impacted investments, both locally and internationally. These events have included the Global Financial Crisis (GFC), the sovereign debt crisis, and continuing weaknesses in the US and European economies.
DBD members’ individual benefits haven’t traditionally been subject to market volatility, because investment returns don’t directly change the formulas used to calculate defined benefits. However the performance of almost all investments has been directly affected by recent market conditions.
So although your benefit is determined by a formula, the pool of money that’s used to pay benefits has been impacted by this protracted global investment volatility.
What’s the Trustee doing to protect the DBD?
The Trustee has elected to trigger a second ‘monitoring period’ under Clause 34 of the Trust Deed. This means the financial health of the DBD will continue to be closely monitored over the coming months and years. Depending on the outcome of these reviews, it may be necessary to reduce benefits in future to secure the DBD’s financial health, even if there is some improvement in investment performance.
Please be assured that protecting the long-term financial position of the DBD is a key priority for us at UniSuper.
To find out more:
This information is current as at 25 November 2011. It is general information only and is not intended to be advice. It has been prepared without taking account of your individual objectives, financial situation or needs. Before deciding to acquire, hold or change an interest in any UniSuper product, you should consider whether this information is appropriate for your personal circumstances and consider the relevant product disclosure document for your membership category, available from your employer or UniSuper. You may also wish to obtain advice from a licensed financial adviser.
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