TAL (formerly Tower) as a consequence of its prior acquisitions of a range of insurers and wealth managers has a suite of older-style superannuation funds that are no longer offered on the market.
As of the 1st October 2012, TAL will be closing the following superannuation funds;
- Blue Ribbon Series – Super
- Blue Ribbon Plus – Super
- Blue Ribbon Executive – Super
- Prestige Superannuation Bond
- TOWER Managed Superannuation Bond
- Bank Bond Superannuation (ex-Prefsure)
Members in these superannuation funds will be progressively moved to TAL’s ‘ARC Classic Super’ a more modernised superannuation fund with features similar to its existing ARC Master Trust.
Members should have received a ‘Significant Notice Event’ letter in June 2012 from TAL outlining the changes that will be applied to the product and the transition arrangements applicable. Part of the transition is a change in member number. Members will need to notify employers to ensure that contributions are paid into the correct accounts once the changeover has occurred.
What are some of the changes between the old products and ARC Classic Super?
There are a number of changes that offer improved benefits for existing clients including;
TAL (formerly TOWER) Blue Ribbon Products
- Wider investment offering, reduced insurance premiums and higher insurance sums insured available
- Around a 10% reduction in the withdrawal fee and a more simplified surrender fee.
TAL (formerly TOWER) Superannuation Bond Products
- Outstanding fees waived on conversion, access to life insurance and expanded investment choice.
Across the board, members will notice a change in investment management fees. Members who have been previously invested in the ‘capital assured’ option will be able to nominate other investment options, however the ‘capital assured’ investment option is closed to new members and any monies moved out will not be able to transferred back into this investment option in the future.
Overall, we view the changes offered by the ARC Classic account generally as an improvement on the features and fees offered over the existing legacy products and should see members better off when compared to the prior conditions; with the most notable improvement being the reduction in the exit fees which for some members can be significant.
Feature Snapshot of the ARC Classic Superannuation Fund
- Administration fee – Up to 1.6% (1.6% by default)
- Investment Cost – between 0.329% (Cash) to 1.03% (Ethical Growth)
- Member Fee – $99 p.a.
- Contribution Fee – up to 4%
- Withdrawal Fee
- Series 1 – As per the conditions of the existing policy and set out in the significant events notice (before considering other products check this fee as it may be significant!)
- Series 2 – $70.06
|High Growth||Australian Shares||Ethical Growth||Property|
- Death Only
- Death and TPD
The snapshot is as of the 8th October 2012 and full terms and conditions of the ARC Classic Superannuation Fund can be found in the PDS.
In spite of the improvements to this fees and features of this ARC Classic, the change in products and the up to 10% reduction in exit fees may be a good time for existing members to consider their superannuation and retirement options and to obtain superannuation advice to ensure that they are invested in a suitable superannuation fund for their retirement. Members will be moved automatically from the legacy products to ARC Classic Super. Before making any investment desicions, you need to refer to the PDS and consider if any other changes are suitable for your needs and circumstances. If you require advice, Primoris Financial can provide superannuation advice to assist.
Where can I find out more about ARC Classic Super? Visit http://www.arcmt.com.au/classicsuper
About the Author – Benjamin Irons
Benjamin has been involved in the financial services industry since 2004. Benjamin has a Bachelor in Business, Diploma of Financial Services (Financial Planning). Previously a Financial Adviser and a business owner, Benjamin has worked with hundreds of individuals and businesses to implement simple strategies to improve wealth. Benjamin writes for a number of websites to assist people take control of their finances and find their financial freedom!