Cbus announces changes to admin fees, premiumsBY JAMIE WILLIAMSON | WEDNESDAY, 11 MAY 2022 12:22PM
Read more: Cbus, Media Super, Justin Arter
Following on from the completion of its merger with Media Super, Cbus will shave its administration fees by 25%. However, at the same time, some members will begin paying more for death and TPD.
The reduction in the dollar-based administration fee will apply to all Cbus members and all members in the Media Super division from July, Cbus said.
Their admin fees will drop from $2 a week to $1.50 a week, as the benefits of increased scale are realised. The percentage-based component remains the same at 0.19% of the balance each year.
This means a member with a $50,000 balance will go from paying $104 a year plus 0.19% to $78 a year plus 0.19%.
"The benefits of scale are clear, enabling a downward trajectory on fees. Mergers are a contributor to this. Lower fees will help members to grow their super balance," Cbus chief executive Justin Arter said.
"Cbus' total product fees are competitive and greater scale enables Cbus to spread fixed costs to reduce the average cost per account. Scale also brings greater capacity to invest in the Fund's internal capabilities."
However, at the same time, some Cbus members will see their insurance premiums go up from July.
Cbus has said that while premiums on death and TPD will reduce for most younger members, members aged 35 and over will see theirs increase.
Death premiums for members aged 25-34 across all occupation categories will drop, while TPD premiums will increase. Premiums for both TPD and death will either increase or remain as is for all members aged 35 and over in all categories.
The fund said the changes are a result of fewer claims from younger members and more claims from older members.
"Insurance through Cbus protects our members and their families when they need it most. We've been able to negotiate a decrease or stable premiums for younger members, while a rise in premiums has been unavoidable for some member cohorts to ensure the cost of providing insurance is reflected in the price," Arter said.
He added that the fund is committed to keeping premiums as low as possible.
The changes to insurance premiums don't apply to Media Super members.
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