A defined benefit fund with $77 million in funds under management is completing a successor fund transfer to a Mercer subplan.
Factory Mutual Insurance Company Superannuation (FMIC) members and assets will be transferred from the existing fund to a Mercer sub-plan which sits within Mercer's Corporate Superannuation Division of its Mercer Super Trust.
The new plan will keep the FMIC name. Equity Trustees will cease as trustee as new trustee Mercer Superannuation takes over.
Members were notified by Equity Trustees in March and will be automatically transferred to the new plan on 29 April 2021, unless they choose to exit the fund prior to that date.
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Equity Trustees said the successor fund transfer was deemed to be in the best interests of members.
The insurer of the fund will change. Currently, TAL provides group insurance for FMIC. In the new plan, insurance will be provided through AIA Australia.
Members were assured that there would be no changes to their defined benefit arrangements.
"The investment strategy in the new plan will initially match as closely as possible to the current investment strategy," Equity Trustees said.
"You will be able to elect your own investment strategy for accumulation accounts from the available investment options in the new plan."
Defined benefit fees and costs, however, will change. This will involve a change from crediting rates to unit pricing.
Currently there is no investment fee in the FMIC fund but following the transfer to Mercer Super Trust the investment fee will be 0.30%.
The estimated indirect cost ratio will decrease from 0.98% to 0.25%.
The activity fee for contribution splitting will be slashed to zero in the new plan, members were previously charged $88.88 for this service.
There will also no longer be fees for processing payment splits, placing a payment flag on a benefit or lifting a payment flag on a benefit. These fees are currently between $157 to $230.
Meanwhile, the fee for processing an application for information will increase from $307.50 to $556.00.
The administrator will also change from OneVue to Mercer Outsourcing.
As of 31 December 2019, FMIC had just 97 members and paid out more than $3.3 million for the year.