If you're a Defined Benefit Division (DBD) member, you probably work full-time within the university sector, receive generous super contributions of up to 17% from your employer and are making standard member contributions.
Questions about the Defined Benefit Division (DBD)?
UniSuper's Defined Benefit Division explained booklet summarises how the DBD works.
If you’re a DBD member, your benefit will generally be made up of:
- a defined benefit component, and
- an accumulation component.
In most circumstances:
- 14% of the employer contributions we receive will be allocated to your defined benefit component.
- If your employer is making contributions at the rate of 17% the remaining 3% will be allocated to your accumulation component.
- Your standard member contributions will be allocated to your defined benefit component.
Have you recently joined the DBD?
DBD members have the choice of transferring into an Accumulation 2 account within their first 24 months of membership.
If this is you, our Choosing your style of super video will help you understand the difference between the two styles of super. You should also take some time to read the
The DBD’s key advantages include protection from market downturns and the greater ability for members to predict their future benefits.
Defined Benefit component
Your defined benefit component is typically financed by:
If your employer contributes 17% to your super, the additional 3% will be directed to your accumulation component.
Defined benefit formula
Your defined benefit component is calculated using a formula (see below). This formula generally takes into account:
- Your average salary over the last five years
- How long you have been a DBD member for, scaled back for breaks or periods of part-time work
- Your age when you retire, and
- The level of standard member contributions you make.
Defined Benefit retirement and leaving service formula for a lump sum benefit
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*You can also see the full DBD formula and definition of terms in the Defined Benefit Division and Accumulation 2 Product Disclosure Statement.
Accumulation component
Your accumulation component will typically be made up of:
- the remaining 3% from your employer contribution (if your employer makes contributions at the rate of 17%),
- any additional voluntary member contributions you make,
- investment returns (positive or negative),
- money you roll over from a previous fund, and
- any other contributions received into your account like government co-contributions.
Fees, expenses, taxes, insurance premiums and other costs will be deducted from your accumulation component.
Your super investment
You can choose how your accumulation component is invested by selecting from our diverse range of investment options.
Before you make any decisions you should read the PDS and the How we invest your money booklet. You should also consider obtaining financial advice from a qualified financial adviser.
Investment earnings can be positive or negative depending on how the investment options you have chosen—or the default investment option if you haven’t made an investment choice—have performed. Negative returns may impact your final benefit.
Contributions you can make into the DBD
All contributions you make into your super are capped at a certain amount. If you exceed these caps your contributions will be taxed at much higher levels.
Standard member contributions
In addition to your employer contributions, you’re required to make standard member contributions if you’re a DBD member, unless you choose to reduce them under the Fund's contribution flexibility arrangements (see below).
Standard member contributions come out of your pay and go to finance your defined benefit component.
You need to make a certain amount of standard member contributions to maintain your full defined benefit entitlements.
How to maintain your full defined benefit entitlements
| How much does your employer contribute to your super? |
Minimum level of standard member contributions you need to make |
| Before-tax |
After-tax |
| 17% |
5.25%
|
4.45% |
| 14% |
8.25% |
7.00% |
Reducing your standard member contributions
You can choose to reduce your standard member contributions. This arrangement is called contribution flexibility.
Once you’ve made a decision to reduce your standard member contribution rate you can’t increase them at a later stage if you change your mind. It may also mean there will be no contributions going into your accumulation component. It’s therefore important you become familiar with how this could affect you.
Learn more about reducing your standard member contributions, and how it affects your membership in the Contribution flexibility fact sheet and application form.
Voluntary member contributions
Voluntary member contributions go into the accumulation component of the Defined Benefit Division and include:
See more on the types of contributions that can go into your super, including spouse contributions and government co-contributions:
DBD membership benefits
Benefits of being a DBD member include:
See more benefits of being a UniSuper member
Read more about the DBD in the Defined Benefit Division and Accumulation 2 PDS.
Get in touch
If you have any questions about the DBD or your membership in general, contact us.
UniSuper Advice can help you with your investment decisions.