Corporate governance

In May 2020 we updated you on our progress in adopting the Insurance in Super Voluntary Code of Practice.

As well as detailing the range of measures we introduced over the 2018/19 financial year, we stated that, in light of the challenges presented by the COVID-19 pandemic, our goal for the rest of the 2020 calendar year was to implement the rest of our transition plan.

By 31 December 2020 we planned to:

• Comply with new requirements to communicate your insurance benefits to you, to make it easier for you to understand the benefits that you have; and
• Monitor our compliance with the Code, and report this back to you in the annual Code compliance report published on our website.

However, the COVID-19 pandemic continued to affect our progress with this plan and we were unable to meet this deadline. As a result, we now aim to implement these measures and complete our transition by 30 June 2021.

The Code came into effect on 1 July 2018, and super funds who choose to adopt the Code have until 1 January 2022 to become compliant with it. We already comply with large parts of the Code.

In October 2019 we let you know about our progress in adopting the Insurance in Super Voluntary Code of Practice.

As well as detailing the range of measures we introduced over the 2018/19 financial year, we stated that our goal for the rest of the 2019/20 financial year was to implement the rest of our transition plan.

By 30 June 2020 we planned to:

• Comply with new requirements to communicate your insurance benefits to you, to make it easier for you to understand the benefits that you have; and
• Monitor our compliance with the Code, and report this back to you in the annual Code compliance report published on our website.

However, our progress with this plan has been affected by the COVID-19 pandemic. As a result, we now aim to implement these measures and complete our transition plan by 31 December 2020.

The Code came into effect on 1 July 2018, and super funds who choose to adopt the Code have until 30 June 2021 to become compliant with it. We already comply with large parts of the Code.

In December 2018 we let you know our plan for adopting the Insurance in Superannuation Voluntary Code of Practice.

Focused on core principles including transparency, fairness, respect, and honesty, the Code was developed by the superannuation industry to improve the insurance offered to super fund members, and to help members better understand the insured benefits they have.

The Code came into effect on 1 July 2018, and super funds who choose to adopt the Code have until 30 June 2021 to become compliant with it.

We already comply with large parts of the Code; below is a summary of our progress to date:

What has Qantas Super implemented so far?

We’ve implemented everything we had in our transition plan to complete by 30 June 2019.

We’ve worked with our insurer and administrator to introduce:

• Additional options to make it easier for you to reduce, cancel and change your insurance cover. You can now change your cover over the phone or through our website;
• A refund of your premiums, if you cancel your insurance within 14 days of being notified that you’ve received automatic cover;
• A new process to ask permission to check if you already have cover with another super fund when you join Qantas Super; and
• Shorter timeframes when responding to insurance-related enquiries and complaints, and shorter timeframes when assessing claims.

Our goal for the rest of this financial year is to implement the rest of our transition plan. By 30 June 2020, we will:

• Comply with new requirements to communicate your insurance benefits to you, to make it easier for you to understand the benefits that you have; and
• Monitor our compliance with the Code, and report this back to you in the annual Code compliance report published on our website.

Code requirement to consider younger members

The Code states that consideration must be given to appropriate levels of cover and premiums for younger members.

We had advised in our transition plan that we would be unable to comply with this requirement, because our premium rates for income protection cover did not vary by age.

We are pleased to report that, since then, we’ve worked with our insurer to reduce premiums for income protection cover for our younger members. From 1 July 2019, members aged below 45 will receive a reduction in their premiums.

This change means that we now comply with the Code requirement.

Important notes

The statements above reflect the current transition plan that is based on our expectations at the date of publishing. These expectations are entirely subject to change as we proceed through the transition process. You will be kept informed of our progress in implementing the Code.

The current benefits to which members are entitled are as set out in the Trust Deed and Rules and relevant member disclosure documents. Legislative provisions also provide protection to members for insurance benefits. The Code does not override these provisions.

The Insurance in Superannuation Voluntary Code of Practice came into effect on 1 July 2018. The Code has been developed by the superannuation industry to improve the insurance offered to you as a super fund member and to help you to better understand the insured benefits you have. For these reasons we are supportive of the Code and have started to implement it. Super funds who adopt the Code have until 30 June 2021 to become compliant with it.

When will Qantas Super comply with the Code?

We already comply with large parts of the Code, which includes providing a straight forward claims experience if you need to make a claim. We are currently working with our insurer and administrator to make the necessary adjustments to comply with other Code requirements. Our expected timing for the adoption of key sections of the Code is:

By 30 June 2019:

• we will provide additional options on how to cancel, reduce or change your cover if you wish;
• we will ask your permission to help you work out if you have any other insurance cover in another super fund;
• we will comply with the requirements to allow the reinstatement of cover if you ask us to do so within a specific period of being cancelled; and
• we will comply with new timeframes to respond to you if you have an enquiry or wish to make a complaint.

By 30 June 2020:

• we will comply with new requirements to communicate your insurance benefits to you, to make it easier for you to understand the benefits that you have; and
• we will monitor our compliance with the Code and report to you in the annual Code compliance report published on our website.

As the Code is voluntary, we will adopt the parts of the Code that we believe are in our members’ best interests. Below is a summary of two aspects that we will not adopt in full:

1. Code requirement that premiums are less than 1% of salary

In some divisions the average cost of automatic insurance cover, over a working lifetime, is more than 1% of salary. We are mindful that insurance premiums which are deducted from members’ accounts reduce super benefits, however we believe this remains appropriate as:

• unlike many other superannuation funds, we provide automatic cover for income protection, as well as death and total and permanent disablement (TPD),
• a significant proportion of our members would find it difficult to obtain TPD and income protection cover outside of Qantas Super at reasonable rates, due to the high risk nature of their occupations; and
• the insurance benefits that you automatically receive are tailored to you based on your salary, and set at a level to adequately protect your family and your lifestyle, at a reasonable cost.

2. Code requirement to consider younger members

The Code states that consideration must be given to appropriate levels of cover and premiums for younger members.

Historically the premium rates for income protection have not varied by age. We recently reviewed this practice and confirmed that it was preferable for our members to have fixed premium rates for all ages to avoid the very sharp increase in premium rates that would otherwise occur at older ages. We will continue to review our premium rates.

Important notes

The statements above reflect the current transition plan that is based on our expectations at the date of publishing. These expectations are entirely subject to change as we proceed through the transition process. You will be kept informed of our progress in implementing the Code.

The current benefits to which members are entitled are as set out in the Trust Deed and Rules and relevant member disclosure documents. Legislative provisions also provide protection to members for insurance benefits. The Code does not override these provisions.

Read more about the Code.

On 1 July 2018, the Insurance in Superannuation Voluntary Code of Practice comes into effect.

What is the code?
The code was developed by the industry for two key reasons:

• to improve the insurance offered to super fund members; and
• to help members better understand the insured benefits they have in super.

What’s Qantas Super’s position on the code?
We know that, for many Qantas Super members, the insurance benefits provided as part of your super are important. We believe the code is generally aligned to the interests of members. The code also contains a range of principles, including transparency, fairness, respect, honesty, and timelines that we believe are appropriate.

We’ve conducted a preliminary analysis of the code’s key requirements and have identified a number of changes that would have to be made to our current insurance arrangements to allow us to implement the standards of the code.

In order to make those changes, we’ll need the support of our insurer as well as our other service providers. Most importantly, as a fund, we must also ensure that any changes we make are consistent with our legal obligations, including to act in the best interests of our members as a whole. If we determine that any of the changes are not appropriate, or may not be consistent with our legal obligations to members, we may decide not to adopt those requirements of the code.

Next steps for Qantas Super
Subject to these qualifications, we have decided that, in principle, we intend to start adopting the code from 1 July 2018.

By 31 December 2018, we’ll share our proposed transition plan to become compliant with those standards of the code that are consistent with our legal duties, and the extent to which we expect to comply with all the standards. Funds that adopt the code have until 30 June 2021 to comply with it.

We’ll regularly review our adoption of the code, including when there are any changes that are made, to ensure we continue to act in accordance with our legal obligations to members.

What you need to do
Nothing. We’re simply letting you know what we’re doing as a fund that’s committed to its members and to improving your confidence in your financial future.