Product and legislation changes that may affect you
05 May 2021
6
min read
QSuper is making some changes to our QSuper Product Disclosure Statements and Guides. Find out if any changes impact you.
Ensuring you understand how changes to legislation and our products might impact you is important to us.
We recently released a QSuper product and legislation update for members about some changes.
This includes changes to some of our investment options, including how we invest your money.
Some of our insurance terms and conditions are also changing. This does not mean a change to your insurance cover or costs.
There are also some other changes including pending legislation around transfer and contribution caps.
See the changes below and some Frequently Asked Questions about what the changes mean.
Investment changes
We aim to provide strong, long-term performance and investment options that are tailored to your needs.
To give us the flexibility to achieve these objectives, we have made some changes including widening asset allocation ranges for some investment options.
From 1 July 2021, the asset allocation ranges will change for the following investment options:
Moderate
Balanced
Aggressive
Socially Responsible
Outlook
Aspire 1
Aspire 2
Focus 1
Focus 2
Sustain 1
Sustain 2
See pages 2-3 of the Product and legislation update May 2021 for the full list of changes to the asset allocation ranges.
We are also updating the Standard Risk Measure, also known as the number of negative annual returns which could be expected over any 20-year period, for our Diversified Bonds and Lifetime Sustain 2 investment options.
When it comes to our Self Invest option, we are increasing the number of Exchange Traded Funds (ETFs) available.
FAQs on Investment changes
Why are the changes being made to asset allocation ranges? Show content
These ranges give QSuper the flexibility to make investment decisions that will help us meet our investment objectives as market conditions change.
What will be the Standard Risk Measure (SRM) change for Diversified Bonds? Show content
Before 1 July 2021, it was between 1 and 2 times, or rated low to medium risk.
From 1 July 2021, it will be between 2 and 3 times, or medium risk.
What will be the SRM change for Sustain 2? Show content
Before 1 July 2021, it was less than 0.5 times, or very low risk.
From 1 July, it will be between 0.5 and 1 times, or low risk.
What can the SRM be useful for? Show content
This measure can help you assess the risk for your investment options.
All QSuper investment options have a SRM rating, which tells you the number of expected negative annual returns over any 20-year period. We review these ratings at least once each year to ensure they reflect market changes.
It’s important to remember that the SRM is only one consideration when making an investment decision.
What will the changes to ETFs available in the Self Invest option mean for investment management fees? Show content
The increase in the number of ETFs available in Self Invest means the range of investment management fees that apply for Self-Invest ETFs will widen from 0.03-0.59% before 1 July 2021, to up to 1% from 1 July 2021.
Insurance changes
We are making some changes to our insurance by adding some new definitions and updating terms and conditions for some claims.
These changes may impact any claim an eligible member makes for an injury or illness that happens from 1 July 2021.
- What won’t be changing is a member’s insurance cover and cost.
- These changes will not impact the current claim or pending claim of any member.
FAQs on Insurance changes
What are the changes to QSuper’s insurance cover? Show content
For any insurance claim where a member has an injury or illness that starts after 30 June 2021, there will be some changes to insurance terms and conditions and some new definitions.
These changes are:
For income protection cover:
- Workers compensation offset – payment changes
- Removal of Graduated Return to Work additional payment
- Removal of CPI increases
- Definition changes for Partial and temporary disablement and Total and temporary disablement.
For TPD cover:
- Definition change for Total and permanent disablement
- Definition change for date of disablement.
For death cover:
- Clarification to when death cover is reduced.
For all types of cover:
- Changes to when a pre-existing exclusion period will apply to a member’s cover.
There are also three new definitions that will apply from 1 July 2021 for:
- Other income
- Workers Compensation benefits
- Medical care.
Will the cost of insurance be changing? Show content
The cost of insurance will not be changing. Only some insurance claims terms and conditions and the addition of definitions are changing. If you have an injury or illness that starts after 30 June 2021, these could impact any insurance claim you make.
What do the changes mean to a claim I may make? Show content
If you are currently making a claim or are on claim, these changes will not impact your claim.
They may affect any claim you make for an injury or illness that happens after 30 June 2021. Some new definitions and changes to some terms and conditions will affect what you can claim for and when you can be paid an insurance benefit.
Why are the changes being made? Show content
We aim to provide appropriate and affordable insurance cover for members. These changes are designed to help us meet this objective.
How will I be told about the changes?Show content
All members will be sent the Product and Legislation update May 2021 with a covering letter to provide context via their preferred method of communication.
Legislation changes
The Australian Government is increasing the total superannuation balance limit that is used to determine whether you are eligible for several super-related measures for the following financial year, including non-concessional contributions.
The Australian Government is also increasing contribution caps for how much you can add to super. Contributing too much could mean extra tax.
In a third change under Australian Government legislation, from 1 July 2021, the general transfer balance cap is increasing from $1.6 million to $1.7 million. The change means you may be able to transfer more super into a tax-free retirement account, like the Retirement Income Account or Lifetime Pension.
FAQs on other changes, including legislation
What does the increase to contribution caps mean and how much will they change? Show content
In terms of making additional contributions to your superannuation, there are limits set by the Australian Government on how much you can add. Contributing too much could mean extra tax.
For before-tax (or concessional) contributions, the caps will increase from $25,000 to $27,500 from 1 July 2021.
For after-tax (non-concessional) contributions, the cap will increase from $100,000 to $110,000 from 1 July 2021.
Will the change to the total superannuation balance limit impact contribution caps? Show content
Before 1 July 2021, if your total superannuation balance is $1.6 million or more at the prior 30 June, your non-concessional contributions cap is nil.
From 1 July 2021, if your total superannuation balance is $1.7 million or more at the prior 30 June, your non-concessional contributions cap is nil.
Will it affect any other rules? Show content
If you are under age 65 at any time in a financial year, you may be able to contribute up to three times your non-concessional cap. This is known as the ‘bring-forward rule’ and means you are bringing forward the cap for up to the next two years.
Under the changes, from 1 July 2021:
- If you did not trigger a bring-forward arrangement in either 2019-20 or 2020-21 and your total super balance is less than $1.48 million at 30 June 2021, then you may be able to make non-concessional contributions (after tax) up to a maximum of $330,000.
- If you have between $1.48 million and $1.59 million, then you may be able to contribute up to $220,000. Otherwise the maximum you can put in is $110,000.
- If your total superannuation balance is $1.7 million or more at 30 June 2021, your non-concessional contributions cap is nil.
What is the general transfer balance cap? Show content
The transfer balance cap is a limit on the total amount of superannuation that can be transferred into tax-free retirement accounts, such as the QSuper Retirement Income Account and QSuper Lifetime Pension.
The change means you may be able to transfer more super into a tax-free retirement account.
Each person will have their own personal transfer balance cap between $1.6 and $1.7 million, depending on their circumstances. To check the balance of your personal cap, you can check your ATO online account using myGov.