Mercy Super - Always for you

All defined benefit members were sent a letter on 20 March 2020 providing details of their estimated defined benefit transfer value. This follows the Member notice issued on 16 December 2019 letting you know that the defined benefit entitlements will be closed on 1 June 2020.

To help you understand what this change means for you, we have prepared some of the common Questions and Answers below.

Right now your Mercy Super benefit is made up of two separate parts:

  1. An Accumulation Account component based on contributions made by you and your employer, investment earnings on those contributions, less taxes, fees and costs plus
  2. A defined benefit component based on your fixed Accrued Benefit Multiple* and your salary.

At or around 1 June 2020 the value of your defined benefit will be converted to a dollar amount. This amount, known as your transfer value, will be added to your existing Mercy Super Accumulation Account.

Why is this change happening now?

The majority of Mater employees currently receive only accumulation superannuation with a small number retaining defined benefits. As the Defined Benefit fund is in a satisfactory financial position, it’s now an appropriate time to do this.

Note – this change is not associated with any other changes within Mater or the impact on financial markets of the recent coronavirus (COVID-19) outbreak.

Effectively the transfer ‘cashes out’ the full value of your defined benefit which will be converted to a transfer value that will be added to your existing accumulation account. It will also include some enhancements to the current defined benefit entitlement.

After your transfer value is added to your existing Accumulation Account it will continue to have investment earnings added, based on your chosen investment option(s).

As is the case now, all Mater’s ongoing contributions will be paid into your Accumulation Account and the balance will continue to accumulate over time, together with any contributions you make and investment earnings, less deductions for taxes, fees and charges and any applicable insurance premiums.

How will the transfer value be determined?

Details of how the transfer value will be calculated and the estimated amount has been provided in the letter sent to you on 20 March 2020. The transfer value amount is calculated as follows:

  • Your Accrued Benefit Amount equal to – your Fixed Accrued Benefit Multiple times the highest of your Final Average Salary or Superannuation Salary (this amount is subject to a minimum of your Minimum Requisite Benefit), plus
  • An additional 5% of this amount as your Risk Transfer Enhancement.

You should refer to your personalised letter for the details that apply to you.

Will I be worse off?

For defined benefits your employer accepts the investment risk in financing the cost of the benefits, however this risk was largely mitigated through fixing the multiple for defined benefit members in 2012 and all future superannuation support provided to employees through accumulation style benefits.

As your defined benefit multiple was fixed in 2012, growth of your defined benefit component is limited to salary growth. Growth of your Accumulation Account depends on your contributions and investment returns and you have choice and control over how your super is invested. In the accumulation account you bear the investment risk.

It is important to recognise that the defined benefit component of your super has only been growing through changes to your salary since the multiple was fixed in 2012. Since then, your existing Accumulation Account has been receiving all superannuation contributions made on your behalf. Because of this, your Accumulation Account makes up an increasingly significant portion of your total super benefit entitlements.

It is worth keeping in mind that Mercy Super has eight investment options for you to choose from, including some that are very low in risk.

Will I be compensated for the transfer of risk?

It is recognised that the closure of your defined benefits does transfer the investment risk on the future value of this part of your super to you. Your transfer value includes some enhancements to your current defined benefit entitlement to provide some compensation for this transfer of risk.

This includes:

  • Removal of the discount to the Accrued Benefit Multiple for members under age 55,
  • Using the highest of your Final Average Salary or Superannuation Salary, and
  • An additional enhancement of an extra 5% of your calculated Accrued Benefit amount.

To help you through the process you also have access to personal financial advice at no cost to you (subject to a capped amount).

We encourage you to talk to a Mercy Super financial adviser for a personal consultation to discuss the changes with respect to how they affect you, and for guidance on selecting the investment option that is most appropriate for this part of your super.

The personalised letter that was sent to you on 20 March 2020 contains all the relevant details of your estimated transfer value, how it was calculated and the proposed timing of the transfer.

We are available to talk you through the changes and can provide personal consultations and advice through our financial advisers. Any personal advice will be at no cost to you (subject to a capped amount). If you do have any immediate questions or concerns, we encourage you to:

  • Contact Wendy Tancred, Mercy Super CEO, on 07 3163 8398, or
  • Book an appointment to speak with a Mercy Super financial adviser. Phone 1300 368 891 or email

How do I choose what investment option to transfer into?

Mercer Super’s financial advisers are there to assist you to choose the investment option that’s right for you.

This change also provides an opportunity for you to get their expert advice on your overall situation and ensure your finances are on track so you can better plan for your retirement.

What if I don’t choose an investment option?

If you don’t choose how you want your transfer value invested, it will go into your Mercy Super Accumulation Account and will be invested in the same option that applies to new money paid into that account.

What will this change cost me? Will I be charged a fee for the conversion of my defined benefit?

There is no cost to you for this change or for the conversion of your defined benefit.

Can I use my own Financial Adviser for advice?

Yes, Mercy Super will reimburse you for the cost of advice relating to the closure of your defined benefit component, capped at $1,320 including GST.

To claim the reimbursement we will need evidence of the advice provided (to ensure the advice and any recommendations related specifically to the changes to your Defined Benefit entitlements) and the cost incurred before processing any reimbursement. This includes a copy of:

  • the invoice and receipt from your financial adviser, and
  • the “Scope of Advice” section within your Statement of Advice.

Send this information attached to an email advising us that you wish to claim the reimbursement and send it to

Note – the period for the reimbursement of financial adviser expenses is limited. All reimbursement requests must be received by 22 June 2020.


Refer to your personalised letter dated 20 March 2020 for an explanation of terms.

The information in this Question and Answer guide relates to general information only and does not take into consideration your personal circumstances. Specific information relating to your defined benefits and your accumulation account was provided in your Mercy Super information pack which was sent to you on 20 March 2020. You should consider obtaining financial advice tailored to your own personal circumstances.

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