Changes to Cbus’ Trust Deed
The Cbus Trust Deed was updated on 24 December 2021. Find out what changed and what this means for you.
A change to the law impacts how trustees cover some costs
Since Cbus was established, there have been significant changes to the way super funds are regulated, including more obligations and much higher penalties for non-compliance.
From 1 January 2022 a trustee cannot pay for certain costs, like trustee penalties, out of the assets of a super fund. We have a strong track record of complying with superannuation laws, but this new law presents a unique challenge for trustees of profit-for-member super funds like Cbus.
Cbus and other profit-for-members super funds don’t have access to separate funding of its own to meet costs like these. So while for-profit super funds (e.g. retail funds) will have their own income and funding available, industry super funds have had to develop an alternative method to cover these costs and manage these financial risks.
This change to the law was part of the Financial Sector Reform (Hayne Royal Commission Response) Bill.
Changes to the Cbus Trust Deed will ensure any obligations are met
To help us deal with the new rules, Cbus had to change its Trust Deed to allow the Cbus trustee to take a trustee services fee (subject to certain restrictions) from the fund. The Supreme Court of New South Wales confirmed that these Trust Deed amendments were appropriate on 20 December 2021 and the amendments became effective on 24 December 2021.
The funds collected from this fee will be set aside in the trustee’s own account and used to cover the costs the law now prevents a super fund from reimbursing. The fee is expected to be paid from the fund’s existing reserves and as such, won’t impact your investment return. The trustee fee will not increase the fees you pay either.
- Two-year cap: The amount charged within two financial years can’t be more than 0.10% of the fund’s net assets.
- Total funds cap: The fee can’t be charged if the trustee already holds an amount equal to more than 0.14% of the fund’s net assets.
Every year the trustee will decide whether to charge the fund some or all of the fee allowed. How this fee is structured and its amount will then be reviewed every four years.
Working in your best interests
This change is in the best interests of Cbus members because it limits any impact of the new rules on members and ensures the trustee has the financial strength needed to continue supporting you through your working lives and into retirement.
The main purpose of this fee is to help manage the personal financial risks directors of the trustee face in their role as director of the trustee of Cbus so they can continue to meet their obligations to members.
Frequently asked questions
Does this mean my fees are increasing?
No. The fees you pay already cover these costs, so we don’t expect your fees to increase as a result of this change.
You’ll always get at least 30 days’ notice before any increase to your fees.
Will this change impact my investment returns?
No. These changes don’t impact your investment returns.
How much is the trustee likely to charge the fund?
While the trustee is entitled to charge a fee up to the caps listed above, it plans to also limit the amount of the fee to what it expects may be required to cover the costs.
This means that each year the trustee will decide whether to charge some or all of the allowable fee, and in some years, an amount may not be charged to the fund at all.
The trustee will never charge more than is allowed under the Trust Deed.
What is a trustee?
Can I get a copy of the Cbus Trust Deed?