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Home Significant Event Notice - September 2020

Significant Event Notice - September 2020


From 1 November 2020, we’re making some important changes to your legalsuper account. 

Since 1989, legalsuper has been committed to supporting Australia’s legal community. Our core focus is to optimise outcomes for our members and continue providing competitive fees, insurance and investment performance.

Important changes to insurance fees, investments and the administration fee rebate threshold

Significant Event Notice (SEN) - issued 15 September 2020

This SEN is also available in your MemberAccess account. login to view at any time. 

Changes to insurance fees (insurance premiums) 

The cost of insurance cover will increase due to a sustained and material increase in the number of insured claims. In addition, the number of members to pay premiums which fund the payment of benefits has reduced significantly as a result of government reforms. This has been further compounded by the additional pressures arising from the COVID-19 pandemic. These pressures have also impacted many other super funds and insurance premium increases have been widespread.


Changes to Investments

The changes to investments are changes in risk profile and risk level for the Balanced index investment option, changes in return objectives for the Balanced Socially responsible and Balanced index investment options, Change of investment manager for the Balanced Socially responsible option and Asset allocation changes for some investment options. Read more detail below.


Administration fee rebate threshold increase

Administration fees for balances which exceed an average of $350,000 and higher in a financial year are capped. The $350,000 threshold has not been indexed since 2009 and will increase to $450,000. Read more below.


Changes to insurance fees

The cost of insurance cover will increase

Many super funds have announced material increases in premiums for Death, Total and Permanent Disablement (TPD) and Salary Continuance insurance. These premium increases have occurred due to a range of factors including increases in the number of claims, the rising incidence of mental illness claims and legislative changes which reduce the number of members eligible for insurance. The legal community has a higher incidence of anxiety and depression symptoms relative to other sectors. 

The number of claims lodged and paid to legalsuper members for TPD is at a high level. This number is expected to continue to increase due to the effect of COVID-19 and the economic fallout on the health and well-being of Australians. 

The number of members to pay premiums which fund the payment of benefits has reduced significantly. This is as a direct result of three specific Government reforms, which we have previously communicated to you: 

  • Protecting Your Super (PYS) effective 1 July 2019; 
  • Putting Members' Interests First effective 1 April 2020; and
  • Early Access to superannuation in response to the COVID-19 pandemic effective 20 April 2020. 

The reduced pool of members paying premiums and the increasing cost of claims has resulted in higher premiums needing to be paid, to maintain the existing level of Death and TPD insurance cover provided through legalsuper to its members. 

legalsuper engaged Rice Warner to undertake an independent review of the proposed increases in premiums by OnePath (legalsuper's insurer) which involved them working closely with the insurer's pricing actuary to understand and query the methodology and assumptions used. Rice Warner concluded that OnePath's increased premiums were reasonable. 

legalsuper will soon commission a holistic review of its insured benefit in the context of the significantly changed insurance landscape. 

What options do you have?

Death and TPD insurance exists to provide increased peace of mind by providing additional financial support for you and your dependents in the event you die, become terminally ill or totally and permanently disabled. The amount of insurance that is appropriate for you will vary depending on your personal circumstances and will change through your life. 

If you want help with checking the level of insurance that may be appropriate for you, our website includes calculators to indicate how much insurance you may need. Visit legalsuper.com.au/insurance-needs 

Most members will have been allocated a 'default' level of Death and TPD insurance on joining. The amount of insurance varies by age. By way of example, members aged 25 to 44 may currently receive default Death & TPD cover of $440,000 for an insurance fee of $7.80 per week. The amount of cover varies as you get older. A tax deduction arises in respect of insurance fees and so the net amount deducted from your account will be $6.63 per week ($7.80 per week less 15% tax). 

For self-employed members, the default level of Death and TPD insurance is $250,000 and insurance fees vary by age.

Given the increase in insurance fees, the options you have include the following: 

  • Take no action. Any insurance you now have will continue. Your insurance fees will increase as set out below.
  • Increase your insurance. Your application to increase your insurance is subject to acceptance by the insurer.
  • Reduce your insurance. You can apply to reduce your insurance at any time.
  • Cancel your insurance. You are able to cancel your insurance at any time. Insurance fees will cease.

What is changing

1. Increased insurance fees for Death and TPD Insurance cover
From 1 November 2020, insurance fees for Death cover and TPD cover will increase for all members by 35.6%.

If your Death and TPD cover (or Death Only cover) is unitised insurance cover, the new weekly fee per unit of cover, from 1 November 2020, will be:

  • $2.64 Death & TPD (previously $1.95)
  • $1.86 Death Only (previously $1.37)

If you have fixed insurance cover, the new insurance fee continues to depend on your age and gender. The fixed insurance cover fees that will apply from 1 November 2020 are shown in table 1 below.

2. Increased insurance fees for Salary Continuance cover
If you have applied for and been issued Salary Continuance cover, the level of increase in insurance fees, from 1 November 2020 is shown below:

Benefit Payment PeriodIncrease in insurance fees from 1 November 2020
2 years, to age 60 or to age 6525.4%

The increased insurance fees continue to depend on your age, gender, chosen Waiting Period, chosen Benefit Payment Period and any loading applied by the Insurer because of factors such as your health or occupation. The Salary Continuance insurance fees that will apply from 1 November 2020 are shown in tables 2, 3 and 4 below.

Why has the cost of cover increased?

legalsuper has partnered with OnePath Life Limited (OnePath) (ABN 33 009 657 176), (AFSL 238341) ('Insurer'), for the provision of our group insurance since 1 October 2005. Since that time, this is only the second insurance premium increase. The last increase was four years ago in October 2016. Many other super funds have passed on several premium increases in that same timeframe. 

We comprehensively review our insurance offer every three years and continually monitor all aspects of our arrangements with OnePath. 

Our core focus during these reviews is to optimise overall benefits to our members and continue providing a competitive and sustainable insurance offering. 

Having completed the most recent review, legalsuper will continue with OnePath, under the arrangements as set out below

The importance of insurance

Your legalsuper insurance offers you the flexibility to change your cover to suit your needs at different life stages. You have the option to apply to increase, decrease or cancel your cover at any time. 

You should consider that insurance is not 'set and forget' and that you will derive the most benefit from your cover by continually assessing important milestones in your life related to your career, your health and your personal circumstances, for example marriage, children, divorce, mortgage, etc. 

You can read more information about your insurance options in the current legalsuper Superannuation Product Disclosure Statement (PDS) and Employer Sponsored Super & Personal Super Additional Information.

New insurance fees for fixed insurance cover

Effective 1 November 2020

Fixed insurance cover applies to members of the Personal Division as well as to Employer-sponsored members who elect to switch from unitised cover to fixed cover. Your insurance fee depends on your age, gender, chosen Waiting Period, chosen Benefit Payment Period and any loading applied by the Insurer. Expand the table below to see what an annual insurance fee per $10,000 of fixed cover will be.

Table 1: Fixed Cover - Death Only and combined Death & TPD cover

Annual insurance fee per $10,000 of fixed cover

Current AgeMale
Death Only
Male
Death & TPD
Female
Death Only
Female
Death & TPD
15 - 19$8.56$9.78$3.48$4.00
20 - 24$7.70$9.79$3.08$4.11
25 - 29$5.78$8.41$2.37$3.72
30 - 34$5.48$9.19$2.75$5.25
35 - 39$6.20$12.01$4.07$9.41
40 - 44$8.83$19.85$6.01$16.95
45 - 49$13.37$34.98$7.73$27.34
50 - 54$19.66$60.17$11.68$48.61
55 - 59$28.80$98.32$17.57$75.30
60$36.76$132.41$21.91$93.85
61$39.88$146.61$23.85$102.16
62$43.07$161.76$26.28$112.53
63$46.38$178.02$29.18$125.01
64$49.85$195.81$32.48$139.10
65$65.21$233.63$44.29$167.30
66$74.44$268.87$51.08$193.11
67$84.82$310.58$58.99$223.92
68$96.93$360.71$67.56$260.23
69$109.40$416.70$77.08$301.57
70$126.01NA$85.37NA
71$144.94NA$95.69NA
72$166.23NA$108.64NA
73$190.27NA$124.20NA
74$217.33NA$142.94NA
75$247.94NA$165.30NA
76$282.54NA$191.87NA
77$322.06NA$223.09NA
78$367.30NA$259.66NA
79$418.92NA$302.23NA
80NilNANilNA


New insurance fees for Salary Continuance cover

Effective 1 November 2020

Investment fees change depending on your age, gender, Waiting Period and Benefit Payment Period. Expand the tables below to see what an Annual insurance fee will be for a $100 Monthly Benefit for the appropriate Payment Period. If you are unsure what your Waiting Period or Benefit Period is, you can log in to MemberAccess to find out. 

Table 2: Benefit Payment Period – 2 years

Annual insurance fee per $100 Monthly Benefit* 

Waiting Period >30 day 30 day60 day 60 day90 day 90 day 
AgeMaleFemaleMaleFemaleMaleFemale
15 - 19$3.16$3.51$1.83$2.01$1.18$1.28
20 - 24$3.29$3.62$1.92$2.09$1.20$1.32
25 - 29$3.52$4.14$2.08$2.41$1.17$1.48
30 - 34$4.26$5.42$2.50$3.14$1.29$1.73
35 - 39$5.64$7.40$3.34$4.31$1.74$2.33
40 - 44$7.74$10.07$4.75$6.12$2.71$3.71
45 - 49$10.91$13.58$6.73$8.29$4.59$6.09
50 - 54$15.91$18.38$10.60$11.96$8.11$9.58
55 - 59$24.29$25.53$16.25$16.69$14.37$14.06
60$31.75$31.56$22.42$20.90$19.85$17.07
61$34.95$34.01$24.70$22.56$22.10$18.06
62$37.39$30.64$25.91$23.20$22.52$17.56
63$25.47$24.21$16.65$14.88$12.75$9.67
64$8.40$7.99$5.49$4.92$4.21$3.19

* The above rates include stamp duty.

Table 3: Benefit Payment Period – to age 60

Annual insurance fee per $100 Monthly Benefit* 

Waiting Period 30 day 30 day60 day60 day90 day90 day
AgeMaleFemaleMaleFemaleMaleFemale
15 - 19$10.50$14.07$5.86$7.93$4.45$6.38
20 - 24$11.56$15.42$6.55$8.75$4.85$6.93
25 - 29$13.66$19.25$7.81$11.02$5.24$8.56
30 - 34$17.79$26.77$10.12$15.15$6.28$10.45
35 - 39$24.60$37.54$14.04$21.31$8.75$14.25
40 - 44$34.08$50.32$20.16$29.67$13.46$21.66
45 - 49$46.15$63.00$27.26$37.02$21.31$31.83
50 - 54$58.66$70.99$36.98$43.92$31.22$39.33
55$62.35$69.20$38.89$42.27$34.72$37.98
56$60.94$65.53$37.72$39.70$33.80$34.94
57$54.31$57.03$33.06$33.95$28.75$28.29
58$37.53$39.20$21.53$22.01$16.64$15.83
59$12.38$12.93$7.11$7.26$5.49$5.23

Table 4: Benefit Payment Period – to age 65

Annual insurance fee per $100 Monthly Benefit* 

Waiting Period30 day 30 day 60 day60 day90 day90 day
AgeMaleFemaleMaleFemaleMaleFemale
15 - 19$10.56$14.31$5.91$8.05$4.50$6.55
20 - 24$11.67$15.76$6.61$8.95$4.92$7.14
25 - 29$13.89$19.84$7.96$11.37$5.35$8.87
30 - 34$18.28$28.00$10.41$15.86$6.47$11.02
35 - 39$25.66$40.08$14.68$22.76$9.22$15.36
40 - 44$36.39$55.30$21.57$32.68$14.53$24.14
45 - 49$51.20$72.64$30.37$42.84$24.10$37.48
50 - 54$70.86$90.26$45.06$56.29$39.20$52.17
55 - 59$93.07$102.90$58.77$63.64$56.97$59.60
60$100.60$101.30$66.16$62.59$62.11$54.45
61$98.38$95.92$64.28$58.84$59.54$48.87
62$86.78$82.71$55.74$49.91$49.45$38.54
63$58.57$55.70$35.51$31.74$27.71$20.98
64$19.34$18.37$11.72$10.47$9.15$6.91

* The above rates include stamp duty.


We're here to help

Call us on 1800 060 312  Monday - Friday, between 8:00am and 8:00pm Australian Eastern Standard Time (AEST) for assistance.

Changes to Investments

Risk Profile Changes

The ASFA Standard Risk Measure for the Balanced index investment option has been adjusted




Risk Profile (likelihood of producing a negative return every 20 years)Risk Profile (likelihood of producing a negative return every 20 years)Risk levelRisk level
Investment optionUntil 31/10/20 (years)From 1/11/20 (years)Until 31/10/20From 1/11/20
Balanced index (accumulation)

3 - 4 in every 20 years


4-6 in every 20 years
5: Medium to High

6: High
Balanced index (pension)

3 - 4 in every 20 years


4-6 in every 20 years5: Medium to High6: High

Change of manager for the Balanced Socially responsible investment option

The investment manager for the Balanced Socially responsible option has changed from AMP Capital to Pendal Group. 

The Balanced Socially responsible option was until recently invested in AMP Capital's AMP Capital Ethical Leaders Balanced Fund. Due to concerns with investment performance and recent reports about culture at AMP, legalsuper has terminated AMP Capital and transferred the investment into the Pendal Group's Sustainable Balanced Fund. 

As a result of this change, there has been a corresponding change in both the return objective and the strategic asset allocation for this option. 

Return objective changes

 Effective 1 November 2020, the return objectives of the following investment options have been updated.

Return objective (pa, over rolling 10-year periods) net of all fees and taxes except the weekly $1.30 administration fee.

Investment OptionUntil 31/10/20From 1/11/20
Balanced Socially responsible (accumulation)CPI + 3.5%CPI + 3.0%
Balanced index (accumulation)CPI + 2.8%CPI + 3.0%
Balanced index (pension)CPI + 3.3%CPI + 3.5%

Asset allocation changes

Effective 1 November 2020 

Asset allocation is the combination of different asset categories or classes, such as Australian shares, overseas shares, fixed interest and cash. The investment return and risk of an investment option are largely determined by its asset allocation. The following changes will be made to each option: 

  • Strategic asset allocation changes in line with current portfolio strategy; 
  • The permitted ranges for some asset classes have also been adjusted.

Details for each investment option are below:

MySuper balanced & balanced


Asset ClassAsset allocation up to 31/10/20Asset allocation from 1/11/20Asset allocation up to 31/10/20Asset allocation from 1/11/20
Australian Shares27%27%20% - 50%10% - 40%
International Shares27%27%10% - 40%10% - 40%
Alternatives20%20%10% - 30%10% - 30%
Property12%12%0% - 25%0% - 25%
Fixed Interest12%11%0% - 20%0% - 20%
Enhanced Cash2%0%0% - 30%0%
Cash0%3%0%0% - 20%

Growth

Asset ClassAsset allocation up to 31/10/20Asset allocation from 1/11/20Asset allocation up to 31/10/20Asset allocation from 1/11/20
Australian Shares34%34%20% - 50%10% - 50%
International Shares34%34%20% - 50%20% - 50%
Alternatives12%12%0% - 20%0% - 20%
Property10%10%0% - 20%0% - 20%
Fixed Interest7%7%0% - 20%0% - 20%
Enhanced Cash3%0%0% - 20%0%
Cash0%3%0%0% - 20%

High growth

Asset ClassAsset allocation up to 31/10/20Asset allocation from 1/11/20Asset allocation up to 31/10/20Asset allocation from 1/11/20
Australian Shares42%40.5%30% - 60%20% - 50%
International Shares42%40.5%20% - 50%20% - 50%
Alternatives10%10%0% - 20%0% - 20%
Property6%6%0% - 20%0% - 20%
Cash0%3%0%0% - 20%

Balanced Socially responsible

Asset ClassAsset allocation up to 31/10/20Asset allocation from 1/11/20Asset allocation up to 31/10/20Asset allocation from 1/11/20
Australian Shares25%29.1%15% - 40%10% - 40%
International Shares33%29.1%15% - 40%10% - 40%
Alternatives6%14.5%0%-13%0% - 20%
Property9%3.9%0% - 20%0% - 20%
Fixed Interest25%12.6%0 % - 45%0% – 50%
Cash2%10.8%0% - 20%0% - 20%

Balanced index

Asset ClassAsset allocation up to 31/10/20Asset allocation from 1/11/20Asset allocation up to 31/10/20Asset allocation from 1/11/20
Australian Shares35%34%20% - 45%10% - 45%
International Shares25%24%10% - 45%10% - 45%
Property10%10%0% - 20%0% - 20%
Fixed Interest25%24%0% – 50%0% – 50%
Enhanced Cash5%0%10% - 50%0%
Cash0%8%0%0% - 20%

Enhanced cash


Asset ClassAsset allocation up to 31/10/20Asset allocation from 1/11/20Asset allocation up to 31/10/20Asset allocation from 1/11/20
Enhanced Cash100%97%0% - 100%0% - 100%
Cash0%3%0%0% - 20%

Australian shares

Asset ClassAsset allocation up to 31/10/20Asset allocation from 1/11/20Asset allocation up to 31/10/20Asset allocation from 1/11/20
Australian Shares100%97%0% - 100%0% - 100%
Cash0%3%0%0% - 20%

Overseas shares

Asset ClassAsset allocation up to 31/10/20Asset allocation from 1/11/20Asset allocation up to 31/10/20Asset allocation from 1/11/20
International Shares100%97%0% - 100%0% - 100%
Cash0%3%0%0% - 20%

We're here to help

Call us on 1800 060 312  Monday - Friday, between 8:00am and 8:00pm Australian Eastern Standard Time (AEST) for assistance.


Changes to the Administration fee rebate threshold

Increase to the Administration fee rebate threshold

In July 2009, legalsuper introduced an 'Administration fee rebate' such that administration fees charged by legalsuper were capped for average account balances in excess of $350,000.

 The threshold from which the rebate applied has not changed since its introduction in 2009. 

If your average account balance* at the end of a financial year exceeds $350,000 during the entire financial year, legalsuper caps the total combined amount of administration fees (including the DIO Asset fee, if applicable) and DIO account fee (if applicable) so that you are only charged administration fees up to that $350,000 average.

 Where the fee cap applies, any excess fees will be rebated effective 1 July of the next financial year and the rebate will be shown on your next annual statement. 

If you exit legalsuper after 30 June, but before the fee cap is applied, you will receive the fee cap rebate as an additional payment. 

Changes effective 1 November 2020 

  1. The 'Administration fee rebate threshold' will increase to $450,000.
    This means that, for the 2020/21 financial year, the 'Administration fee rebate threshold' will be $350,000 up to 31 October 2020 and then $450,000 from 1 November 2020. 2. 
  2. The 'Administration fee rebate threshold' will be indexed annually
    From 1 July 2021 in accordance with the 'All Groups Consumer Price Index (CPI)'. The table below shows the treatment for the 2020/21 and 2021/22 financial years:
Financial YearAdministration fee rebate threshold
1 July 2020 to 30 June 2021$350,000 to 31 October 2020 (123 days) and then
$450,000 to 30 June 2021 (242 days)
i.e.
= ($350,000 x 123/365) + ($450,000 x 242/365)
= $416,301.37
1 July 2021 to 30 June 2022$450,000 indexed in accordance with the annual movement of the All Groups CPI between 30 June 2020 to 30 June 2021.

*The fee cap does not apply if your account with legalsuper is closed on or before 30 June during that financial year.

We're here to help

Call us on 1800 060 312  Monday - Friday, between 8:00am and 8:00pm Australian Eastern Standard Time (AEST) for assistance.



Meet with us to discuss these changes

Get personal support from a Client Service Manager
As a legalsuper member, you have access to a highly experienced and qualified Client Service Manager who you can speak with in person (via Zoom) or over the phone, at no additional cost.

Your Client Service Manager can help with matters that relate to:

  • Your super and retirement savings
  • Your insurance options
  • Retirement planning strategies

To arrange an appointment online with a Client Service Manager near you, send us a message and we'll contact you.

Send us a message




This information is of a general nature and does not take into account your specific needs. You should consider your own financial position, objectives and requirements before making any decision. You should also obtain and read the legalsuper Product Disclosure Statement (PDS) before making any decision in relation to legalsuper. Past performance is not necessarily an indicator of future performance. Issued by Legal Super Pty Ltd, Level 37, 140 William Street, Melbourne, 3000 ABN 37 004 455 789 AFSL 246315 as the Trustee for legalsuper ABN 60 346 078 879.

Get personal support from a Client Service Manager

We can meet with you to discuss these changes. As a legalsuper member, you have access to experienced and qualified Client Service Managers. To arrange an appointment via Zoom or phone, send us a message and we'll contact you.