Important insurance changes on the way
To ensure the sustainability of the insurance we offer, from 1 July 2015 LGsuper’s insurance premiums increased and some other changes took place.
Information packs were posted to all LGsuper members impacted in any way by the insurance changes during May and June. If you pay premiums for the insurance cover you have, you would have also received an Insurance premium estimate, outlining the cost of your insurance at the time we prepared the statement (which was 23 April 2015) and the premium we estimated you could pay from 1 July 2015.
Why did LGsuper's insurance change?
Since 1 July 2012 LGsuper’s premiums and cover has remained unchanged, despite an unprecedented growth in insurance claims across the superannuation industry.
The sustained rise in insurance claims and pay-outs has led to an industry-wide increase in group insurance premiums which many super funds across the nation have already passed on to their members.
Following a review of our insurance arrangements, LGsuper found itself in the same situation as it reappointed OnePath as the fund’s insurer after completing a competitive bid process.
What were the changes?
The changes that would have affected you from 1 July 2015 depended on the type of account and insurance cover you had at the time. You can find more information about your situation in our Significant events section.
- Premiums increased and there were some other changes too
Members with an Accumulation account and those members with a defined benefit and additional insurance or income protection would have noticed an increase in premiums from 1 July 2015. Some changes to the terms and conditions of the cover offered including a change to the definition of total and permanent disability also applied from that date.
- Adjustments to the Defined Benefits Fund
LGIAsuper continues to cover the cost of insurance that supports all defined benefits. However, from 1 July 2015, Defined Benefits Fund members (excludes former City Super members with a Defined Benefit account) would have noticed a change to the Minimum Requisite Benefit and Contributions plus earnings calculations to take into account the rising cost of insurance and future superannuation guarantee amounts.
Some members could experience a decrease in cover
You may have noticed a decrease in the level of insurance you have from 1 July. This could be a natural decrease based on your age at 1 July 2015, a direct result of the new arrangements, or for other reasons as we explain below.
- Members between age 60 and 64
Because the value of each unit of Death and TPD cover reduced at the same time premiums increased, if you were aged 60 and over at 1 July and had not fixed your cover you could end up paying more for the same or significantly less cover than you had before 1 July. We strongly encourage you to review your current situation and change your cover to suit your insurance and financial needs.
- When you celebrate a birthday
As your age increases the value of each unit of cover you have naturally decreases. Because the new insurance arrangements apply from 1 July 2015, we have taken into account your age at that date when estimating your level of insurance cover and premium. This means you may notice a reduction in the value of your insurance from 1 July 2015. This reduction would have occurred regardless of the insurance changes from that date.
- Members who recently changed their cover
If you recently requested a change to your insurance it may not be reflected in the Insurance premium estimate. Remember, the estimate was prepared on 23 April 2015 and is based on the information we had available to us at the time.
For more information relating to your situation, see our Significant events section.
Do I need to do anything?
Because insurance is an important way to protect yourself against financial uncertainty and unexpected loss we encourage you to carefully read the information you received in the post, review your current situation and apply to adjust your cover to suit your insurance and financial needs.
If you never received your information pack, you can find out more about the insurance changes from the Significant events section or you can contact us to speak to one of our friendly representatives.