SFT to Mercer Super Trust for ARC, pension, annuity and risk clients

Niall McConville

Summary

• All members of the TAL Superannuation and Insurance Fund will be transferred to Mercer Super Trust by way of successor fund transfer on 31 May 2021.
• All members will receive a significant event notice before the transfer (copies of these available below).
• No action required by your risk-only clients.
• No changes to insurance premiums or sums insured for risk-only clients.
• Phased roll-out of TAL Super Tax Rebate for all retail risk-only products.
• Most accumulation super and allocated pension members will pay lower fees.
• TAL Life Limited remains the insurer and administrator of risk-only products.
• Mercer will become the administrator of the accumulation super and pension products.
• New third-party authorities required from super and pension members.

Background

As you may be aware, in November 2020, we moved most Accelerated Protection customers with their insurance in superannuation from the TAL Superannuation and Insurance Fund (TSIF) to TAL Super by way of Successor Fund Transfer (SFT).   Subject to all requirements being met, on 31 May 2021 all remaining members of TSIF will be transferred to the Mercer Super Trust.  

Here's a list of products being transferred to Mercer:

Why are we making this change?

TAL Superannuation Limited (TASL) (ABN 69 003 059 407, AFSL 237851), the trustee for TSIF, recently reviewed the super and insurance arrangements it offers to its members, and determined that it is in the interests of members to transfer their benefits to the Mercer Super Trust. 

The trustee for the Mercer Super Trust is Mercer Superannuation (Australia) Limited (MSAL) (ABN 79 004 717 533, AFSL 235906).

What does this change mean for your risk-only clients?

No impact on your risk-only clients’ policies or premiums

Upon transfer, a new account will be created for your risk-only clients in TAL Super, a plan in the retail division of the Mercer Super Trust. There’ll be no impact to your risk-only clients’ policies or premiums as a result of the SFT.

Importantly, you and your clients do not need to take any action or do anything differently as a result of this SFT – benefits, sums insured and premiums payable under their policies remain unchanged. 

You can click here to find out more about TAL Super.

No change to how premiums are collected

Unless your clients provide us with alternative instructions, their premiums will continue to be collected in the same manner as they were before the transfer.  We’ll also ensure that requests from external funds to roll over payment for insurance premiums will continue, directed to TAL Super, after the transfer.

TAL Super Tax Rebate

From 15 June 2021, we’ll begin the phased roll-out of the TAL Super Tax Rebate for all risk-only products held in TAL Super where premiums are funded via rollover on an annual basis. The rebate is currently only available for certain Accelerated Protection policies.

As the benefit of the 15% tax deduction may be claimed by MSAL in respect of the insurance premiums will be passed onto your clients through their rollover requests as they’ll only need to roll over 85% of their total premium from their external superannuation account from the date this change takes effect for their policy.

Third-party authorities for new risk-only policies

There’ll be no change to third-party authorities your clients have given regarding their risk-only accounts.

What does this change mean for your ARC Super, Pension and Annuity clients?

A new account will be created: 

• for annuity and ARC Super members in the ARC Super Plan division of the Mercer Super Trust.
• for TOWER Superannuation Fund Allocated Pension members in the Allocated Pension Division of the Mercer Super Trust.

Mercer will become the administrator of those accounts.

Lower fees for most members

Mercer is a larger fund and likely to provide benefits of scale and deliver better retirement outcomes for members over the long term. 

In addition, for most members of the fund, the fees payable will be lower. There are a small number of ARC superannuation members who may see a slight increase in fees, including those who: 

• hold either cash-only investments, or are currently invested in a mix of cash & other options and/or
• have an account balance between $16,000 - $30,000.

Information on any changes to fees payable can be found in the Significant Event Notice.

In addition, a transaction freeze will be in place from 25 May 2021 to 16 June 2021 during which time transactions and instructions may be received but will not be processed. Your clients will also see some changes to the ARC Online Member portal. Finally, once the SFT has been completed, your clients will need to contact Mercer for any queries relating to the administration of their policy. 

Termination of loyalty bonus

Some of your ARC Classic 1 and 4 clients may have been eligible for a loyalty bonus if they remained invested in TISF to a specified date.

After the transfer, the loyalty bonus will not be available as part of the ARC Super Plan. In recognition of the removal of the loyalty bonus, a compensation payment will be made to certain eligible members before the transfer. The compensation amount has been determined by taking into account various factors including the potential value of the loyalty bonus, the length of time until eligibility, and administration fees that would have been paid up until the eligibility date. For some members the formula will mean no bonus will be payable. 

Further information on these changes can be found in the Significant Event Notice.

Third-party authorities for new investment accounts

Once the transfer has been completed, Mercer will become the administrator of your clients’ new superannuation, annuity and/or allocated pension accounts.

If there are third-party authorities in place which allow you to access information about, or give instructions in relation to, your client’s ARC Super account, these will no longer apply after the transfer. You will need to contact Mercer after the transfer date and complete their process to maintain these, or similar, permission.   You can contact Mercer to do this.
 

Client communications

In the coming days, we’ll be sending your clients a Significant Event Notice to let them know about the change. After the transfer, your clients will receive:

• an exit statement (issued by TASL); and
• a welcome pack (issued by MSAL). 

Risk-only clients will also receive a:

• new policy schedule; and
• Life Insurance Through TAL Super PDS.

To identify your clients who will receive this communication, please visit the Reporting menu in the TAL Adviser Centre and download your Policy Summary report. You’ll then be able to filter this report to show your clients who hold policies where the ‘policy owner’ is TAL Superannuation Limited. 

Click on the links below to view the relevant Significant Event Notice for your client's policy:

• ARC Super, pension & annuity
• Risk-only

Contact details after the transfer

For superannuation and pension, you and your clients will need to contact Mercer from 1 June 2021 on 1800 682 525.

For questions relating to retail, group or individual risk only insurance clients, there’ll be no change to the contact details you and your clients currently use to contact us.. If you have any general questions about the transfer, please feel free to contact our Adviser Service Centre on 1300 286 937, Monday to Friday 8:00am - 7:00pm (AEST).