Cbus members to benefit from fee reduction
From July, all Cbus Super members and members in the Media Super division will benefit from a reduction in their weekly administration fee from $2.00 to $1.50. The Fund has passed on to members a benefit of the Cbus growth strategy.
Justin Arter, Cbus Chief Executive Officer said, “The benefits of scale are clear, enabling a downward trajectory on fees. Mergers are a contributor to this. Lower fees will help members to grow their super balance.
“Cbus’ total product fees are competitive and greater scale enables Cbus to spread fixed costs to reduce the average cost per account. Scale also brings greater capacity to invest in the Fund’s internal capabilities.”
The weekly administration fee covers the day-to-day management of members’ accounts*.
The Fund has reduced investment fees by $410 million since 2017 for the Growth (MySuper) option through the ongoing internalisation of our investment capability, $170 million of which was in FY2021. Members benefit from this reduction in investment costs alongside internalisation generating solid investment outcomes.
Changes to insurance premiums
The cost of death and total and permanent disablement (TPD) cover will also be changing for some members (based on age groups and occupation category (manual, electech, non-manual or professional)), following a re-alignment to reflect recent claims history.
TPD and Death claims from younger members have been lower in recent years. Claims for misadventure and accidents have lowered during the Covid pandemic. As a result, premiums for younger members (in most categories) have reduced.
Whereas claims from older members, especially in higher risk blue collar jobs, have increased over the last three years. For these members premiums are increasing.
Justin Arter said, “Insurance through Cbus protects our members and their families when they need it most. We’ve been able to negotiate a decrease or stable premiums for younger members, while a rise in premiums has been unavoidable for some member cohorts to ensure the cost of providing insurance is reflected in the price.
“Over the three years to 31 December 2021 we accepted 97.3% of all claims made. This was 100% for death claims and 96.6% for TPD claims. This is much higher than the industry average of 89% for TPD claims as recently reported by APRA.
“Cbus knows how important insurance is and we are committed to keeping premiums as low as possible. As a result of strong advocacy, Cbus was able to negotiate coverage for members aged under 25, or members with balances under $6000, as part of the Putting Members’ Interests First reforms. That is why Cbus is one of few funds that does provide important default cover for young workers and workers in hazardous jobs.
“Under this exemption, Cbus has paid benefits of over $25 million (as at 31/03/22). Of this one third was for members who were teenagers or in their 20s and around two thirds have been paid for members under the age of 39. Without this exemption these members would have received no insurance benefit at all. These members have come from every state and territory in Australia.”
There will be no change to income protection premiums. Media Super members’ premiums will also not be affected.
Details are available in the Significant Event Notice.
Media enquiries: Elisabeth Bowdler, 0412 112 374 or firstname.lastname@example.org
Issued 11th May 2022, United Super Pty Ltd ABN 46 006 261 623 AFSL 233792 as Trustee for the Construction and Building Unions Superannuation Fund ABN 75 493 363 262 (Cbus and /or Cbus Super). All figures are as at 11th May 2022, unless otherwise noted. This information is about Cbus and doesn’t take into account your specific needs. You should look at your own financial position, objectives and requirements before making any financial decisions. Refer to Cbus Product Disclosure Statement and Target Market Determination for more information. Call 1300 361 784 or visit cbussuper.com.au for a copy. Past performance is not a reliable indicator of future performance.
Insurance is issued under a group policy with our insurer TAL Life Limited ABN 70 050 109 450 AFSL 237848. The information in this insurance section provides a brief overview of the insurance types available through Cbus. It does not include all eligibility conditions for acceptance or payment of insurance benefits.
*The total administration fees are made up of a weekly and percentage fee. The Asset Based Fee percentage fee hasn’t changed and remains at 0.19% of a member’s balance each year – up to a maximum of $1,000 a year.
Cbus is the leading Industry Super Fund for the building, construction and allied industries. As one of Australia’s largest super funds, we provide superannuation and income stream accounts to more than 778,000 members and we manage over $68 billion of our members’ money (as at 31 December 2021). Our members include workers and retirees, their families and employers. As of April 2022, Media Super is now a division of Cbus, offering Media Super products. For more than 30 years Media Super has been the industry super fund for Print, Media, Entertainment and Arts, and broader creative industries. At 31 December 2021 Media Super provided superannuation and retirement accounts to 72,000 members and managed $7 billion.