Defined benefit a time bomb
UniSuper has acknowledged that its defined benefit superannuation fund is no longer prepared to pay all the benefits promised to members when they were forced to join this fund. Its latest chief executive, Kevin O'Sullivan, has indicated that a name change, including ``target benefit'' rather than "defined benefit", will be considered. For younger members with many years of employment ahead, and nearly 7000 non commutable lifetime pensioners, a more suitable description could well be "uncertain benefits" scheme.
To promise benefits as UniSuper has done without an employer guarantee to make good any shortfall is the sort of action that would have scandalised Jeremy Cooper's superannuation review and should be closely examined as soon as possible by the new Coalition government.
Read the full article: Defined benefit a time bomb (The Australian, subscription required)