ART overhauls death and TPD insurance fees

Australian Retirement Trust (ART) is overhauling its insurance premium rates for Super Savings members starting July 1, with Standard Death and Total & Permanent Disability (TPD) Assist charges decreasing on average by 14.1% and 31.2% for male and female members respectively.

In the case of a member opting-in for income protection, premium rates are decreasing on average by 16.6% for all members.

However, if a member holds insurance cover through their ART accounts, a new insurance fees of 7% of insurance premium will start applying.

"This fee is included in your insurance premium amount and is only charged to members who have insurance to help cover the cost of administering the insurance arrangements you have in the fund," ART said.

The $370 billion super fund will also change its TPD Assist benefits starting the new financial year.

If a member's 'date of disablement' is on or after July 1, the number of payments will be brought down from six to four and they will be able to a take larger portion of the initial payment, rising from 25% to 40%. The subsequent three payments will be paid out at 20% each.

If the sum insured is less than $25,000, members will be able to access a lump sum payment as well.

ART said it is making standard cover rules "simpler and easier to understand" by starting member's automatic cover for death and TPD after they turn 25 and when their super balance reaches $6000 or more.

Starting July 1, ART is also reducing its weekly administration fee from $1.20 to $1.10. Over one year, this represents a reduction of $5.20 in fees.

Additionally, ART is updating its risk labels on investments. It's high growth option will now move from the 'high' risk label to 'medium to high'. Balance risk-adjusted will move from 'medium to high' to 'medium' label and Australian share index will move from 'very high' to 'high' label.

It will update its performance benchmarks, with Australian shares now being benchmarked against the S&P total return index.

ART is also updating its allocation strategies for its accounts. For its high growth option, ART is reducing its strategic allocation to Australian shares by 1% and increasing allocation in international shares by 0.75% and unlisted assets and alternatives category by 0.5%. It will increase its fixed income allocation by 0.75% and reduce cash holdings by 1%.