Defined Benefit latest updates

31 December update

Published 11 March 2021

Local Authorities Superannuation Fund Defined Benefit Plan (LASF DB) – Vested Benefit Index (VBI) update

Since our 30 September 2020 update on 23 December 2020, equity markets have improved significantly following the US election and the commencement of COVID-19 vaccinations around the world. However, there is a continuing sense of unease and ongoing market volatility which we are monitoring.

The 31 December 2020 VBI results have been finalised as follows:

30 June 2019 (actual)
30 June 2020 (est.)
30 Sept 2020 (est.)
31 Dec 2020 (est.)
LASF DB
107.1%
104.6%
104.5%
109.6%

The 31 December 2020 VBI has improved significantly compared to that at 30 September 2020. This is mainly due to:

  • Investment returns of 6.5% for the quarter which have increased the asset pool supporting the defined benefit liabilities of the sub-plan, and
  • Minimal salary increases advised to Vision Super during the quarter, which have only marginally increased the value of the active member benefit liabilities.

The VBI of 109.6% as at 31 December 2020 satisfies APRA’s Superannuation Prudential Standard 160 (SPS 160).

Vision Super is closely monitoring the investment markets to identify potential threats/opportunities that we may be able to avoid/take advantage of to improve the funding position of the sub-plan.

Shortfall limit

Under the superannuation prudential standards, VBIs must generally be kept above a fund’s nominated shortfall threshold, currently 97%. When an actuarial review/investigation is in progress, a fund’s VBI must be at least 100%.

In the event the VBI falls below the shortfall threshold, the fund’s Trustee is required under the superannuation prudential standards (SPS 160) to formulate a restoration plan to restore the VBI to 100% within three years.

Next update

The next VBI review is scheduled as at 31 March 2021, with results expected to be distributed to employers around mid May 2021.

Vision Super will continue to monitor the sub-plan’s VBI at least quarterly and daily during periods of high market volatility.

Action required (if any)

At this stage, no action is required by you.

We’re here to help

If you want to know more about the VBI or LASF DB, in addition to the quarterly updates, we encourage you to get in touch. We understand that defined benefit plans can be complicated and our dedicated team can answer your questions and provide you with information for both member and employer related queries.

In the next quarterly update, there will be a link to a short video from the investment team which will provide an update on the investment outlook and the flow on impacts to the management of LASF DB. This will be followed by a short question and answer session for those that are interested.

In the meantime, if you have any queries, please contact the Employer Services team on 1300 304 947 or [email protected].

30 September update

Published 23 December 2020

Local Authorities Superannuation Fund Defined Benefit Plan (LASF DB) – Vested Benefit Index (VBI) update (COVID-19 #9)

Since our 30 June 2020 VBI update on 14 August 2020, equity markets have improved following relaxation of COVID-19 restrictions around the world. However, the lockdown in Victoria and the increasing spread of COVID-19 throughout the world with second wave lockdowns in Europe have resulted in market volatility in the quarter ended 30 September 2020 and during the month of October 2020. However, recent announcements about the effectiveness of a number vaccines under development have been positively received even though the threat of the pandemic remains.

The 30 September 2020 VBI results have been finalised as follows:

30 June 2019 (actual)
30 Sept 2019 (est.)
31 Dec 2019 (est.)
31 Mar 2020 (est.)
30 June 2020 (actual)
30 Sept 2020 (actual)
LASF DB
107.1%
107.3%
107.7%
102.1%
104.6%
104.5%

The 30 September 2020 VBI has remained relatively unchanged compared to that at 30 June 2020. This is mainly due to:

  • Investment returns of 1.7% for the quarter which have increased the asset pool supporting the defined benefit liabilities of the sub-plan
  • Salary increases of 1.3% advised to Vision Super during the quarter, which have increased the value of the active member benefit liabilities, and
  • An increase in the number of pensioners commencing lifetime during the quarter, which increase the value of the pension member benefit liabilities.

The VBI of 104.5% as at 30 September 2020 satisfies APRA’s Superannuation Prudential Standard 160 (SPS 160).

Vision Super is closely monitoring the investment markets to identify potential threats/opportunities that we may be able to avoid/take advantage of to improve the funding position of the sub-plan.

Triennial valuation

The triennial 30 June 2020 actuarial investigation has been completed. The Fund Actuary found that the LASF DB plan was in a satisfactory financial position at 30 June 2020 and recommended that all contributions to the plan continue based on the current arrangements that are in place. A copy of the report is available here.

Shortfall limit

Under the superannuation prudential standards, VBIs must generally be kept above a fund’s nominated shortfall threshold. When an actuarial review/investigation is in progress the fund’s VBI must be at least 100%. As the triennial investigation has been completed, the VBI shortfall threshold is now 97% until the next investigation occurs at 30 June 2020.

In the event the VBI falls below this threshold, an interim investigation is required to be carried out by the Fund Actuary and the Fund’s Trustee is required under the superannuation prudential standards (SPS 160) to formulate a restoration plan to restore the VBI to 100% within three years.

Vision Super’s new website

We have recently updated our website at www.visionsuper.com.au and the LASF DB employer-sponsor webpage can be found at www.visionsuper.com.au/employers/db/.

Next update

The next VBI review is scheduled as at 31 December 2020. We expect to distribute an update by mid-February 2021. If the equity markets increase in volatility, we will consider more regular VBI updates based on the level of volatility.

Action required (if any)

At this stage, no action is required by you.

If you have any queries, please contact the Employer Services team on 1300 304 947 or [email protected]

30 June update

Published 14 August 2020

Local Authorities Superannuation Fund Defined Benefit Plan (LASF DB) – Vested Benefit Index (VBI) update (COVID-19 #8)

Since our last update dated 12 June 2020, equity markets have continued to improve following relaxation of some of the COVID-19 restrictions around the world. 

The 30 June 2020 triennial actuarial investigation is currently underway and a review of the financial and demographic assumptions used in the investigation has been completed. As a result, the 30 June 2020 VBI results have been finalised as follows:

30 June 2019 (actual)
30 Sept 2019 (est.)
31 Dec 2019 (est.)
31 Mar 2020 (est.)
30 June 2020 (actual)
LASF DB
107.1%
107.3%
107.7%
102.1%
104.6%

The 30 June 2020 VBI has improved compared to that at 31 March 2020. The movement in the VBI is mainly due to:

  • Investment returns of 6.6% for the quarter which have increased the asset pool supporting the defined benefit liabilities of the sub-plan
  • Salary increases advised to Vision Super during the quarter of 0.6%, which have increased the value of the active member benefit liabilities
  • A pension CPI increase of 1.2% which was applied in June 2020, which has increased the value of the lifetime pension member liabilities, and
  • An improvement in the lifetime pensioner mortality assumptions in line with the sub-plan’s experience. This improvement has increased the value of the lifetime pension member liabilities and, together with a change in the financial assumptions used in the triennial investigation, has resulted in a one-off decrease in the VBI of 1.6% relating to the lifetime pensions of the sub-plan.

The VBI of 104.6% as at 30 June 2020 satisfies APRA’s Superannuation Prudential Standard 160 (SPS 160).

Investment markets

During the June 2020 quarter, we have seen a reversal of some of the falls experienced by the equity markets in the quarter ended 31 March 2020. 

However, a sense of unease is prevalent as the likelihood of further economic disruption from COVID-19 restrictions is increasing as the reported number of new COVID-19 cases and deaths around the world has been increasing. In addition, Australia is on high alert following the introduction of Stage 4 restrictions in Melbourne and Stage 3 restrictions for regional Victoria.

Vision Super is closely monitoring the investment markets to identify potential threats/opportunities that we may be able to avoid/take advantage of to improve the funding position of the sub-plan.

Triennial valuation

As indicated above, the 30 June 2020 actuarial review is currently in progress. This is a triennial investigation and will be a comprehensive review of the sub-plan’s position and is expected to be completed by 31 December 2020.

Until the investigation is completed, the nominated VBI shortfall threshold is 100%. In the event the VBI falls below this threshold, the Fund Actuary will consider the form of a restoration plan as part of his triennial investigation considerations. 

Next update

While the equity markets are less volatile, we will monitor the sub-plan’s VBI on a quarterly basis. This means that the next update is scheduled for the VBI as at 30 September 2020. We expect to distribute this update by mid November 2020. If the equity markets increase in volatility, we will consider more regular VBI updates based on the level of volatility.

In the meantime, Vision Super is closely monitoring the investment markets to identify potential threats/opportunities that we may be able to avoid/take advantage of to improve the funding position of the sub-plan.

Action required (if any)

At this stage, no action is required by you. 

11 June update

Published 12 June 2020

Local Authorities Superannuation Fund Defined Benefit Plan (LASF DB) – Vested Benefit Index (VBI) update (COVID-19 #7)

Since our last update dated 18 May 2020, the COVID-19 restrictions have begun to be tentatively lifted around the world and the equity markets have continued to improve. As a result, it is estimated that LASF DB’s VBI has increased to 105% at 31 May 2020 as follows:

30 June 2019 (actual)
30 Sept 2019 (est.)
31 Dec 2019 (est.)
31 March 2020 (est.)
31 May 2020
LASF DB
107.1%
107.3%
107.7%
102.1%
approx. 105%

Equity markets have continued to improve into early June 2020. The equity market volatility seems to have also subsided with daily movements in the ASX 200 of up to -2%/+3% occurring since mid-May 2020, down from +/-7% in March 2020. If the equity markets continue to improve, this should result in the estimated VBI improving further (all other things being equal). However, as demonstrated today, the economic disruption from the COVID-19 restrictions has the potential to raise market volatility again.

Triennial valuation

The next scheduled actuarial investigation is carried out by the Fund Actuary as at 30 June 2020. This is a triennial investigation and will be a comprehensive review of the sub-plan’s position and is expected to be completed by 31 December 2020.

In the event the VBI falls below the nominated shortfall threshold (ie: 97%), an interim investigation is required to be carried out by the Fund Actuary, unless the next scheduled investigation is due within six months. If the VBI falls below 97% prior to 30 June 2020, LASF DB sub-plan’s next scheduled investigation as at 30 June 2020 will satisfy this requirement.

Next update

While the equity markets are less volatile, we will monitor the sub-plan’s VBI on a quarterly basis. This means that the next VBI update will be as at 30 June 2020 as part of the 30 June 2020 actuarial valuation. We expect to distribute this update by late August 2020.

In the meantime, Vision Super is closely monitoring the investment markets to identify potential threats/opportunities that we may be able to avoid/take advantage of to improve the funding position of the sub-plan.

Action required (if any)

At this stage, no action is required by you. 

18 May update

Published 18 May 2020

Local Authorities Superannuation Fund Defined Benefit Plan (LASF DB) – Vested Benefit Index (VBI) – quarterly update (COVID-19 #6)

The review of the 31 March 2020 VBI for the LASF DB sub-plan has been completed and the Vision Super Board has approved the VBI. As at 31 March 2020, the VBI for the sub-plan was 102.1%. The sub-plan’s recent VBI history is shown below.

20 June 2017 (actual)
30 June 2018 (actual)
30 June 2019 (actual)
30 Sept 2019 (est.)
31 Dec 2019 (est.)
31 March 2020 (est.)
LASF DB
103.1%
106%
107.1%
107.3%
107.7%
102.1%

Since our last quarterly update for 31 December 2019, COVID-19 has caused considerable anxiety and volatility in the investment markets around the world. This has resulted in falls in the ASX 200 and S&P 500 of over 25% and 26% respectively from peaks in mid-February 2020.

The 31 March 2020 VBI has decreased compared to that at 31 December 2019. The movement in the VBI is mainly due to:

  • Investment returns of -5.4% (negative) for the quarter having decreased the asset pool supporting the defined benefit liabilities of the sub-plan, and
  • Minimal salary increases occurring for the quarter which did not increase the defined benefit liabilities.

The VBI of 102.1% as at 31 March 2020 satisfies APRA’s Superannuation Prudential Standard 160 (SPS 160).

The investment performance of the sub-plan

The March 2020 quarterly investment return of -5.4% (negative) represents a significantly better result compared to the ASX 200 and S&P 500 performance due to :

  • The sub-plan’s strategic exposure to equities of 44.5% and actual exposure of 36% in mid-March 2020 which allowed for the offsetting returns from other asset classes including bonds, infrastructure and cash, and
  • The tail risk hedge strategy contributing $63m (approx 3%) to the sub-plan’s returns helping to partly offset equity market falls during the quarter. As of 24 March 2020, the tail risk hedge was fully realised and will not provide any further cover.

Although equity markets have shown signs of a mini-recovery from late March 2020 to date, Vision Super is still monitoring the sub-plan’s financial position. This includes monitoring the global and Australian economic outlook and how this outlook may impact the sub-plan’s financial position. 

We have prepared a more detailed presentation on how Vision Super is managing the sub-plan, which includes BCA Research’s outlook for the Australian economy. The video can be viewed above, or by clicking here

Vision Super will continue to monitor the sub-plan’s VBI at least quarterly and on a daily basis during periods of high market volatility.

Shortfall limit and the next Triennial valuation

Under the superannuation prudential standards, VBIs must generally be kept above a fund’s nominated shortfall threshold, currently 97%. When an actuarial review/investigation is in progress the fund’s VBI must be at least 100%.

In the event the VBI falls below the shortfall threshold, the Fund’s Trustee is required under the superannuation prudential standards (SPS 160) to formulate a restoration plan to restore the VBI to 100% within three years.

The next scheduled actuarial investigation is carried out by the Fund Actuary as at 30 June 2020. This is a triennial investigation and will be a comprehensive review of the sub-plan’s position. This investigation is expected to be completed by 31 December 2020.

In the event the VBI falls below the nominated shortfall threshold (ie: 97%), an interim investigation is required to be carried out by the Fund Actuary, unless the next scheduled investigation is due within six months. If the VBI falls below 97% prior to 30 June 2020, LASF DB sub-plan’s next scheduled investigation as at 30 June 2020 will satisfy this requirement.

Action required (if any)

At this stage, no action is required by you. 

Please remember to advise us of all salary changes as they occur. This assists in ensuring our VBI calculations reflect the latest salary information. 

24 April update

Published 24 April 2020

Local Authorities Superannuation Fund Defined Benefit Plan (LASF DB) – Vested Benefit Index (VBI) update (COVID-19 #5).

Since our last update dated 3 April 2020, COVID-19 continues to cause significant risk to lives around the world and uncertainty in investment markets.

Although equity markets have shown signs of a mini-recovery from late March 2020 through April 2020 to date, Vision Super is still monitoring the sub-plan’s financial position.

Investment Update

Investment markets have rebounded from the late March 2020 lows but they remain choppy. Much about the virus and its impact remain to be discovered including whether, and when, effective treatments and vaccines will become available.

Lockdowns globally have caused a demand shock leading to very low inflation. China has undertaken an easing of restrictions earlier than anywhere else in the world and is recovering economically but slowly. Economic activity is unlikely to recover to pre-pandemic levels for years and this is likely to keep markets subdued. On the bright side, we know what is required to keep the virus contained and this is partly behind the market rally in April 2020. Governments are responding with massive fiscal stimulus, much larger than during the global financial crisis. This has also contributed to the market rally in April 2020 but will lead to problems down the road with how new debt is dealt with.

Domestically, Australia has been very successful to date in containing the virus. However, the economic damage has been significant and will increase the longer the lockdown goes for. The Government has made it easier for people in hardship to access their retirement savings. This was done without any consultation with the industry. Political risk remains high for superannuation with further measures from the government possible with little notice. As such, Vision Super will look to maintain high levels of liquidity overall which comes at some cost in terms of future returns.

Vision Super’s strategy for the defined benefit plan has been successful to date. The tail risk hedging strategy did its job and Vision Super realised $63 million from monetising the strategy in late March 2020. If we had maintained the program as it was, much of this profit would have disappeared in the market rally. While the program cushioned our returns in the downturn, unfortunately that protection is no longer in place and the cost of replacing it is simply too high currently.

Quarterly valuation

We are currently in the process of determining the LASF DB VBI as at 31 March 2020. This quarterly valuation involves more detailed calculations than the daily estimations. The methodology used for the quarterly VBI estimations is determined by the Fund Actuary and incorporates updated member/pensioner details, updated salary information as provided by employers, along with contributions received and benefits paid during the quarter.

The results of the 31 March 2020 VBI calculations will be circulated for approval by the Vision Super Board and then communicated to employers in early May 2020.

When approved, we are planning a video update from both myself and our CIO Michael Wyrsch. If you would like to submit a question for consideration in that update, please send it to [email protected]

Triennial valuation

The next scheduled actuarial investigation is carried out by the Fund Actuary as at 30 June 2020. This is a triennial investigation and will be a comprehensive review of the sub-plan’s position. This investigation is expected to be completed by 31 December 2020.

In the event the VBI falls below the nominated shortfall threshold (ie: 97%), an interim investigation is required to be carried out by the Fund Actuary, unless the next scheduled investigation is due within six months. If the VBI falls below 97% prior to 30 June 2020, LASF DB sub-plan’s next scheduled investigation as at 30 June 2020 will satisfy this requirement.

Action required (if any).

At this stage, no action is required by you.

3 April update

Published 3 April 2020

Local Authorities Superannuation Fund Defined Benefit Plan (LASF DB) – Vested Benefit Index (VBI) update (COVID-19 #4)

Since our last update dated 26 March 2020, the impact of COVID-19 has continued to cause significant volatility in investment markets around the world.

For the period between 23 – 30 March 2020, it is estimated that LASF DB’s VBI has increased by approximately 1% to 100%:

30 June 2019 (actual)
30 Sept 2019 (est.)
31 Dec 2019 (est.)
31 Jan 2020
2 Feb 2020
12 Mar 2020
18 Mar 2020
23 Mar 2020
30 Mar 2020
LASF DB
107.1%
107.3%
107.7%
approx. 109%
approx. 107%
approx. 101%
approx. 100%
approx. 99%
approx. 100%

The above movements reflect the impact of the widely fluctuating equity markets with daily movements in the ASX 200 of up to +/- 7% occurring.

Vision Super is continuing to monitor the sub-plan’s financial position during this period of extreme volatility. We are also closely monitoring the investment markets to identify potential threats/opportunities that we may be able to avoid/take advantage of to improve the funding position of the sub-plan.

We have begun the quarterly estimation of the LASF DB VBI as at 31 March 2020. This is involves more detailed calculations than the daily estimations we have been making during this volatile period. The methodology we use for the quarterly VBI estimations is determined by the Fund Actuary and factors in updated member/pensioner details and updated salary information as provided by employers, along with contributions received and benefits paid during the quarter.

As you would appreciate, there is a significant amount of work involved in the quarterly calculations. The results of the 31 March 2020 VBI calculations will be circulated for approval by the Vision Super Board and then communicated to employers in early May 2020.

We expect that there will be some variation in the estimated 31 March 2020 VBI compared to the estimated 30 March 2020 VBI due to the nature of the quarterly VBI calculations compared to that of the daily monitoring.

As indicated previously, the next scheduled actuarial investigation carried out by the Fund Actuary is as at 30 June 2020. This is a triennial investigation and will be a comprehensive review of the sub-plan’s position and is expected to be completed by 31 December 2020.

In the event the VBI falls below the nominated shortfall threshold (ie: 97%), an interim investigation is required to be carried out by the Fund Actuary, unless the next scheduled investigation is due within six months. If the VBI falls below 97% prior to 30 June 2020, LASF DB sub-plan’s next scheduled investigation as at 30 June 2020 will satisfy this requirement.

For further information on the LASF DB sub-plan, please refer to the LASF Defined Benefit Booklet

Action required (if any)
At this stage, no action is required by you. 

26 March update

Published 26 March 2020

Local Authorities Superannuation Fund Defined Benefit Plan (LASF DB) – Vested Benefit Index (VBI) update (COVID-19 #3)

Since our last update (distributed on 20 March 2020), the global responses to COVID-19 have continued to significantly impact investment markets.

For the period between 18 – 23 March 2020, it is estimated that LASF DB’s VBI has dropped approximately 1%, as shown below:

30 June 2019 (actual)
30 Sept 2019 (est.)
31 Dec 2019 (est.)
31 Jan 2020
2 Feb 2020
12 Mar 2020
18 Mar 2020
23 Mar 2020
LASF DB
107.1%
107.3%
107.7%
approx. 109%
approx. 107%
approx. 101%
approx. 100%
approx. 99%

As previously indicated, the drop in the LASF DB VBI has been softened primarily due to:

  • Strategic exposure to equities of 44.5% and actual exposure of 36% in mid-March 2020. This allows for offsetting returns from other asset classes including bonds, infrastructure and cash, and
  • Payoff returns from the implementation of the tail risk hedge insurance. This hedge has contributed $65m or approx 3% to the sub-plan which has helped to partly offset equity market falls to 24 March 2020. This gain has been wholly reinvested for the back into sub-plan, into cash. As of 24 March 2020, the tail risk hedge was fully realised and will not provide any further cover.

What if the VBI drops below the shortfall limit?

Under the superannuation prudential standards, no specific action is required when the VBI is above the fund’s nominated shortfall threshold of 97% (or 100% during an actuarial investigation). Where the VBI falls below the relevant threshold, a restoration plan is required to restore VBI to 100% within 3 years.

As previously advised, in the event the VBI falls below the nominated shortfall threshold (ie: 97%), an interim investigation is required to be carried out by the Fund Actuary, unless the next scheduled investigation is due within six months. If the VBI falls below 97% prior to 30 June 2020, LASF DB sub-plan’s next scheduled investigation as at 30 June 2020 will satisfy this requirement. This actuarial investigation will be completed by 31 December 2020.

If it is likely that the 30 June 2020 VBI will be less than 100%, the Trustee will develop a proposed restoration plan in consultation with the Fund Actuary, sponsoring authorities/employers, APRA and other relevant bodies. The restoration plan may include any or a combination of the following:

  • Keeping a watching brief on investment market movements
  • Higher regular contributions, and/or
  • A funding call if necessary within the three years

The Fund Actuary will review the proposed restoration plan and, if appropriate, recommend that proposed restoration plan be adopted.

Will there be a funding call?

Funding calls are just one option that may be included in a restoration plan. Depending on the size of the funding deficit/unfunded liability, there are a number of ways for the DB sub-plan to be returned to a satisfactory position and there are no prescribed options to be included as part of a restoration plan.

If Vision Super is required to establish a restoration plan, the final restoration plan must be approved within 3 months of the Trustee receiving the Fund Actuary’s report which includes the Fund Actuary’s recommended restoration plan. If LASF DB sub-plan’s 30 June 2020 VBI is less than 100%, the Fund Actuary’s report will be received by 31 December 2020. Assuming that the report is received on 31 December 2020, the Trustee must adopt the final restoration plan by 31 March 2021.

We appreciate that, as employers, you would like as much advance notice of a funding call as possible to assist you with your own budgeting and planning. At this stage, it is too early to determine whether a restoration plan will be required and whether a funding call would form part of that restoration plan.

Vision Super will continue to monitor the sub-plan’s financial position. We note the next detailed estimation of the LASF DB VBI will be as at 31 March 2020. As indicated above, the next scheduled actuarial investigation is as at 30 June 2020. This is a triennial investigation and will be a comprehensive review of the sub-plan’s position.

For further information on the LASF DB sub-plan, please refer to the Defined Benefit Employer Booklet

Action required (if any)

At this stage, no action is required by you. 

20 March update

Published 20 March 2020

Local Authorities Superannuation Fund Defined Benefit Plan (LASF DB) – Vested Benefit Index (VBI) update

Our last LASF DB VBI update was distributed on 17 March 2020. Since that date, the global spread and responses to COVID-19 have had significant impact on the investment markets. 

However, while LASF DB’s estimated VBI has fluctuated in the intervening period, there has only been an overall drop of approximately 1% in the estimated VBI from 12 March 2020 to 18 March 2020 as follows: 

30 June 2019 (actual)
30 Sept 2019 (est.)
31 Dec 2019 (est.)
31 Jan 2020
2 Feb 2020
12 Mar 2020
18 Mar 2020
LASF DB
107.1%
107.3%
107.7%
approx. 109%
approx. 107%
approx. 101%
approx. 100%

The LASF DB fund is estimated to be at approximately 100% despite recent and ongoing equity market movements, primarily due to:

  • Strategic exposure to equities of 44.5% and actual exposure of 35% in early March 2020. This allows for offsetting returns from other asset classes including bonds, infrastructure and cash, and
  • Payoff returns from the implementation of the tail risk hedge insurance have contributed to the LASF DB investment return for the month to date ending 18 March 2020. This has partly offset equity market falls. However, please note the tail risk hedge has now been fully realised and it will provide no further cover.

Action required (if any)

At this stage, no action is required by you. We will continue to monitor the situation and provide further updates. 

17 March update

Published 17 March 2020

Local Authorities Superannuation Fund Defined Benefit Plan (LASF DB) – Vested Benefit Index (VBI) update

The 31 December 2019 VBI update was recently distributed to all LASF DB authorities and employers. In that update, we advised that we would conduct an employer briefing in March. However, with the spread of CoVID19 and the current market volatility, we have decided to delay that briefing and will send more regular updates on the VBI instead, this being the first.

As highlighted previously, the spread of COVID19 is causing considerable anxiety and volatility in the investment markets around the world. This has resulted in falls in the ASX 200 and S&P 500 of approximately 20-25% from peaks in mid February 2020 to 13 March.

The LASF DB plan needs to take investment risk to achieve long term returns and remain well funded. The portfolio seeks to take investment risk efficiently and takes risk that is necessary to achieve the required earning rates assumed by the Fund Actuary.

As part of the Vision Super de-risking strategy, which has been progressively implemented over the last few years, the LASF DB plan has been partly sheltered from the recent and ongoing equity market movements. This is primarily due to:

  • Strategic exposure to equities of 44.5% and actual exposure 34.4% as at 11 March 2020, and
  • Payoff returns from the implementation of the tail risk hedge insurance.


The impact on the LASF DB VBI over recent period is shown below: 

30 June 2019 (actual)
30 Sept 2019 (est.)
31 Dec 2019 (est.)
31 Jan 2020
2 Feb 2020
12 Mar 2020
LASF DB
107.1%
107.3%
107.7%
approx. 109%
approx. 107%
approx. 101%

We expect volatility to continue across investment markets around the world, but following the worst of the crisis, the return outlook for equity markets is likely to be very attractive.

Vision Super will continue to monitor the plan’s financial position, noting that the next VBI review will be as at 31 March 2020 with a full actuarial investigation occurring as at 30 June 2020.

What if the VBI drops below the shortfall limit?

Under the superannuation prudential standards, no specific action is required when the VBI is above the plan’s nominated shortfall threshold of 97% or 100% during an actuarial investigation. Where the VBI falls below the relevant threshold, a restoration plan to restore VBI to 100% within 3 years is required.

In the event the VBI falls below the nominated shortfall threshold (ie: 97%), an interim investigation is required to be carried out by the Fund Actuary, unless the next scheduled investigation is due within six months. If the VBI falls below 97% prior to 30 June 2020, the LASF DB plan’s next scheduled investigation as at 30 June 2020 will satisfy this requirement. This actuarial investigation will be completed by 31 December 2020.

If it is likely that the 30 June 2020 VBI will be less than 100% based on the initial actuarial investigation work:

  • The Trustee will develop a proposed restoration plan in consultation with the Fund Actuary, sponsoring authorities/employers, APRA and other relevant bodies. This proposed restoration plan may include:
    – Keeping a watching brief on investment market movements
    – Higher regular contributions
    – A funding call if necessary within the three years, and
  • The Fund Actuary will review the proposed restoration plan and, if appropriate, recommend that proposed restoration plan be adopted.

The above also applies if the VBI falls below 100% during the actuarial investigation.

Once the final investigation report is received, the trustee is required to:

  • Provide the Fund Actuary’s report to APRA within 15 days of receipt
  • Approve the final restoration plan within 3 months of receiving the Actuary’s report, and
  • Implement the final restoration plan subject to any changes required by APRA.

Action required (if any)

At this stage, no action is required by you.

We're here to help

You might find the answer to your question in the FAQ below. If you don’t find it there, you can call our Employer hotline on 1300 304 947.

Frequently Asked Questions

It depends how your details have been changed. The most common request is changing a surname due to marriage, which you can do with a certified copy of your marriage certificate, and a Vision Super “Change of Personal Details form” found here: view form

If you have changed your name another way, we recommend you contact us first on 1300 300 820 so we can outline what documents we need to change your details without issue.

If you want to change your address, you can do this by logging onto the secure member portal online, or calling our Member Services team on 1300 300 820.

You can check your balance 24/7 via Vision Online, our secure member secure site, or via the Vision Super app for mobile devices. You can also contact our Member Services on 1300 300 820 or by emailing us on [email protected]

Here’s how it works. You may be able to receive a tax-free contribution from the Government when you make a non-concessional (after-tax) contribution to your super account.  The maximum entitlement that can be received is $500 where your total income is $41,112 or less in the 2021/22 year. This reduces on a sliding scale and cuts out if your total income is above $56,112 in the 2021/22 year.

This is, of course, provided you satisfy work, income and age tests.

Please note that the income threshold test for the co-contribution is your total income, which is calculated as follows:

Total income (assessable income + reportable fringe benefits + reportable employer super contributions – allowable business deductions).

In very basic terms, ‘salary sacrificing’, or ‘salary packaging’ means using some of your before-tax salary to pay for something. In superannuation terms, it is usually an arrangement between you and your employer to contribute some of your before-tax salary into your superannuation account.

In the 2021/2022 financial year, the maximum that can be contributed as before-tax payments is $27,500, this includes your employer SG payments of 10%.

Please note that any after-tax contributions made, where you obtain a tax deduction, are included in this contribution limit.

If you’re contributing by BPAY, it can take Vision Super up to two business days to receive your contribution, then up to three business days to process, although most are done the same day they are received. This will depend upon your financial institution’s processing times.

If you’re contributing by cheque, you will need to allow enough time for your chosen postage method to reach us. Once it has arrived, it can take up to five working days to process.

We can also process contributions by EFT, however, this may take up to three business days.

Best Doctors can help you if you are dealing with an illness, or a chronic or serious condition.

Through your insurance, you and your family get access to Best Doctors which connects you with a network of 50,000 leading medical specialists from around the world. It offers a second opinion when you need it most, to make sure you received the right diagnosis and are on the best treatment plan. You can use Best Doctors at anytime, anywhere, as often as you need for no extra cost, and it’s completely confidential.

Defined Benefit latest updates

Standard Subtitle 1 - The compulsory super that your employer pays into your account each pay may get you a long way towards a retirement you’d like, but it may not be enough to fund the retirement you’d love! Adding a little extra now can make a surprisingly big difference. It all adds up.

Standard Subtitle 2 - The compulsory super that your employer pays into your account each pay may get you a long way towards a retirement you’d like, but it may not be enough to fund the retirement you’d love! Adding a little extra now can make a surprisingly big difference. It all adds up.

1. Need some Super now?

Subsection title + Description
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Numbered title description

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Need some Super now?

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Pull Quote 1 - The gap has serious implications for women, particularly the likelihood of sole reliance on the Age Pension and subsequently, an acute vulnerability to poverty in retirement.

- Elizabeth Broderick, Sex Discrimination Commissioner

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Information Card

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Information Card

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Information Card

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Frequently Asked Questions

It depends how your details have been changed. The most common request is changing a surname due to marriage, which you can do with a certified copy of your marriage certificate, and a Vision Super “Change of Personal Details form” found here: view form

If you have changed your name another way, we recommend you contact us first on 1300 300 820 so we can outline what documents we need to change your details without issue.

If you want to change your address, you can do this by logging onto the secure member portal online, or calling our Member Services team on 1300 300 820.

You can check your balance 24/7 via Vision Online, our secure member secure site, or via the Vision Super app for mobile devices. You can also contact our Member Services on 1300 300 820 or by emailing us on [email protected]

Here’s how it works. You may be able to receive a tax-free contribution from the Government when you make a non-concessional (after-tax) contribution to your super account.  The maximum entitlement that can be received is $500 where your total income is $41,112 or less in the 2021/22 year. This reduces on a sliding scale and cuts out if your total income is above $56,112 in the 2021/22 year.

This is, of course, provided you satisfy work, income and age tests.

Please note that the income threshold test for the co-contribution is your total income, which is calculated as follows:

Total income (assessable income + reportable fringe benefits + reportable employer super contributions – allowable business deductions).

In very basic terms, ‘salary sacrificing’, or ‘salary packaging’ means using some of your before-tax salary to pay for something. In superannuation terms, it is usually an arrangement between you and your employer to contribute some of your before-tax salary into your superannuation account.

In the 2021/2022 financial year, the maximum that can be contributed as before-tax payments is $27,500, this includes your employer SG payments of 10%.

Please note that any after-tax contributions made, where you obtain a tax deduction, are included in this contribution limit.

If you’re contributing by BPAY, it can take Vision Super up to two business days to receive your contribution, then up to three business days to process, although most are done the same day they are received. This will depend upon your financial institution’s processing times.

If you’re contributing by cheque, you will need to allow enough time for your chosen postage method to reach us. Once it has arrived, it can take up to five working days to process.

We can also process contributions by EFT, however, this may take up to three business days.

Best Doctors can help you if you are dealing with an illness, or a chronic or serious condition.

Through your insurance, you and your family get access to Best Doctors which connects you with a network of 50,000 leading medical specialists from around the world. It offers a second opinion when you need it most, to make sure you received the right diagnosis and are on the best treatment plan. You can use Best Doctors at anytime, anywhere, as often as you need for no extra cost, and it’s completely confidential.

Already a Vision Super member?

The great news is you can now open your pension account online through the secure site.

Not a Vision Super member?

You’ll just need to open a Vision Personal account first and then you can transfer across to a Vision Super pension.