Lawyers could be about to become involved with the recent decision of Uni Super’s Defined Benefit Division to reduce the future accrual of benefits previously promised from January 1 next year, and with the inadequacy of its past disclosures to incoming members.
Spurred on by recent publicity about the large cross-subsidy in favour of older members and the realisation that the 2015 benefit reduction will impact most heavily on younger members, a numerate young University of Sydney academic is seeking approval of a late election to exit the DBD.
Underlying this request to exit after the expiry of his 12-month (now 24-month) opportunity to transfer to an accumulation fund is his belated discovery of important features of this fund. Unless the trustees approve his request, he is stuck in the DBD until he resigns or retires, knowing that he is unlikely to obtain a positive real benefit from the fund until after age 45.
The DBD now highlights to new members that the trustees may reduce the benefits promised at a future date.
But when this member joined, that possibility was only mentioned in a short sentence in the product disclosure statement, which few new members would have studied in detail.
This unhappy member is also concerned about the lack of transparency in revealing the extent of the cross-subsidisation of older members.
Read the full article: UniSuper benefits stir up members (subscription required)