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.

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Daryl Dixon

Executive Chairman

Daryl Dixon is one of Australia’s foremost investment experts and a well known writer and consultant. He has provided trusted advice to thousands of personal clients over more than 25 years and is an acknowledged expert in the areas of tax, superannuation (including public sector superannuation), social security and investments.

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