The Australian super industry is constantly changing. Unfortunately, where we as members stand during these changes is often unclear. In this blog post, we will examine some of the key aspects of the industry that have changed over the last year. These include all the major mergers that have taken place in and are scheduled for, 2024 and 2025. We will look at how these mergers will affect the held TPD insurance policies of existing members, as well as touch on the superannuation guarantee (SG) rate increase.
Key changes in the super industry including mergers that have taken place in superannuation for 2024-2025
Mergers Completed in 2024
- Mine Super and Transport Workers Union (TWU) Super: These two funds have merged to form Team Super, focusing on serving transport, energy, and mining workers.
Mergers Scheduled for 2024
- AvSuper and Australian Retirement Trust (ART): This merger is expected to be completed later in 2024.
- Alcoa Super and Australian Retirement Trust (ART): This merger is also expected to be completed later in 2024.
Mergers Scheduled for 2025
- Vision Super and Active Super: These funds are set to merge on March 1, 2025, with Vision Super becoming the successor fund.
As mentioned, the super industry is constantly changing, and there could be additional mergers announced or completed beyond those listed here.
How do changes to superannuation companies affect my existing TPD policy?
Firstly, it is important to note that there has been no industry standard set on how a merger should affect the existing TPD policy member who is grandfathered into a new fund. In many cases there is the expectation that following a merger, your existing insurance entitlement will not be changed and that you will be no worse off when it comes to claimable amounts of TPD and Income protection. However, historically speaking, this has not always been the case.
The successor super fund may have a different insurance provider than the fund that is being merged. In this case, the existing policy may be retrofitted into that of the successor fund. For example, if you had an existing policy with a super fund that offered a set amount of TPD cover, regardless of age, this amount could change if the successor fund offers TPD in a tiered system determined by age.
If your super fund is about to be acquired by a larger fund in a merger look for any correspondence via mail, email or telephone that will inform you of the changes being made to your policy.
Alternatively, you may wish to contact one of our TPD specialists for advice regarding your TPD options.
What is the superannuation guarantee (SG) rate increase?
The Australian government mandates a recommended rate that your employer must legally contribute to your super per quarter (or per elected payment cycle). This is called the superannuation guarantee (SG). The SG is calculated as a percentage of your ordinary time earnings for the contribution period. For example, if your employer contributes to your super quarterly, they will multiply your earnings for those 3 months by the SG rate percentage to work out how much money to contribute.
In July of 2024, the SG rate increased from 11% to 11.5%. It is scheduled to rise again in July of 2025 to 12%.
This rise promises further security for the retirements of the members of all Australian funds. However, it also means that we will be receiving a lesser cut of our hard-earned wages month-to-month.
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