What does the merger mean for defined benefit lifetime pension members?
The trustee's decision to pursue a merger was made after a thorough and careful review to ensure that a merger would be in the best interests of all members, which includes Accumulate Plus, Retirement Access and Defined Benefit members including those receiving a lifetime pension.
Both the trustee and CBA are committed to establishing equivalent defined benefit pension entitlement arrangements as part of the proposed transfers.
Will the future security of my pension entitlements remain the same after they transferred?
CBA’s obligations to members and their beneficiaries have not changed because of the proposed merger to Australian Retirement Trust or on transfer to the CBA UK Scheme.
The CBA continues to be responsible for funding the pension entitlements of transferred from Group Super to Australian Retirement Trust as well as the CBA UK Scheme.
For those defined benefit members of Division B who transfer to the CBA UK Scheme, the trustee of the CBA UK Scheme intends to secure any transferred pension entitlements under the same bulk purchase annuity agreement it has entered into for other CBA UK Scheme members with L&G or, if that is not possible, with another UK regulated insurance company, following which entitlements would benefit from the protection of the UK Financial Services Compensation Scheme.
Does CBA support the transfer of Defined Benefit pensions?
Yes, CBA supports the Group Super trustee’s decision to pursue a merger with Australian Retirement Trust as well as the CBA UK Scheme for a limited number of Division B lifetime pension members.
The trustee worked closely with CBA to understand the future strategy of the fund and remains closely engaged with CBA. Similarly to the trustee, CBA as sponsor of Group Super, considered the evolution of superannuation, the increased expectations and need for scale. CBA and the trustee both concluded, given the increasing need for scale over time and the long-term fee challenges required to ensure the fund remains competitive, that alternatives to continuing a corporate superannuation fund be considered.
Will the Commonwealth Guarantee continue to apply to the relevant divisions?
The Commonwealth Banks Act 1959 was amended by the of Treasury Laws Amendment (2023 Measures No.2) Act 202. This means defined benefit members of Divisions B, C, D and E who were members of the fund immediately prior to 19 July 1996, will continue to be eligible for the Commonwealth Guarantee following the successor fund transfer to Australian Retirement Trust.
Unless you were an employee of CBA or a pensioner of thefund prior to 19 July 1996, you would not be covered by the Commonwealth Guarantee. For instance, members of the CGSSS were transferred into the fund on 3 October 2003. They were not members of the fund on 19 July 1996, therefore are not covered by the guarantee.
Those defined benefit members of Division B who transfer to the CBA UK Scheme will NOT be eligible for the Commonwealth Guarantee. The CBA will provide a guarantee to eligible Division B members who transfer to CBA UK Scheme so that there is no adverse loss of rights or entitlements. Please read the Significant event notice for Division B UK members.
Will the annual indexation of ongoing pension payments change with the transfer?
No changes to the annual indexation of ongoing pension payments will apply as result of the transfer. Australian Retirement Trust and the CBA UK Scheme will continue to index your annual pension (excluding any non-indexed component) in line with how they are currently indexed by Group Super.
What happens in the event of my death?
The rules in either Commonwealth Bank of Australia (UK) Staff Benefits Scheme or Australian Retirement Trust are the same as those that operated in Group Super.
Will I receive part of the Defined Benefit unallocated surplus?
No, Defined Benefit members are not eligible to receive this and individual allocation of the Defined Benefit surplus. The purpose of the Defined Benefit unallocated surplus is to ensure that Defined Benefit’s ratio of assets to vested benefits can withstand market volatility, a well as to ensure that there is adequate long-term funding for Defined Benefit members’ retirement benefits and lifetime pensions. The Defined Benefit unallocated surplus will be transferred to the CBA Group Super Plan with Australian Retirement Trust and continue to be maintained by Australian Retirement Trust for this purpose.
Do I have to transfer to Australian Retirement Trust or Commonwealth Bank of Australia (UK) Staff Benefits Scheme? Can I stay, I don’t want to leave?
As the transfer to Australian Retirement Trust, and for a small number of Division B UK members the transfer to CBA UK Scheme, meets the requirements of a transfer, the Group Super Fund rules then also allows the transfer of defined benefit pension entitlements to occur.
Will my pension benefits remain the same or change with the transfer to either the CBA UK Scheme or Australian Retirement Trust?
The trustee of Group Super is committed to ensuring that the other scheme provides pension entitlements, when the transfer takes effect, that are equivalent to the pension entitlements members have under Group Super before the transfer takes effect.
After the transfer, you would no longer be a member of Commonwealth Bank Group Super. However, your Defined Benefit pension design and how it’s indexed would remain unchanged.
Your regular pension payments would continue to be paid to your nominated bank account. Future payments would no longer be paid by Group Super.
