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 from July.
Justin Arter, Cbus chief executive, said the benefits of scale were clear as mergers were contributing to a downward trajectory on fees.
“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 fund had reduced investment fees by $410 million since 2017 for the Growth (MySuper) option through the ongoing internalisation of its investment capability, $170 million of which was in FY2021.
The cost of death and total and permanent disablement (TPD) cover would 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.
Cbus Super said TPD and death claims from younger members had been lower in recent years with claims for misadventure and accidents lowering during the COVID-19 pandemic. As a result, premiums for younger members (in most categories) had 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.
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.”