Insurance changes for members aged 16-34
Changes to default insurance cover for members age 16-34.
From 1 October 2019, the Plan is making changes to the way in which default death and total and permanent disablement (TPD) insurance benefits are calculated for members aged 16-34. From this date, new members will automatically receive the new insurance benefit calculations, while existing members have the option to opt-in to the new benefit calculations.
How was default insurance cover calculated prior to October 1?
Prior to October 1, default insurance cover was calculated as follows:
20.5% x salary x Future Years of Service (FYS) to age 65.
For example, consider a member aged 45 who has 20 years of potential future service to age 65, whose full time equivalent (FTE) base salary is $45,000. Their default insurance cover is:
20.5% x $45,000 x 20 = $184,500.
Existing members will continue to have their default insurance benefit calculated in this way, unless they decide to opt-in to the new benefit calculations.
What are the new default insurance benefit calculations?
The new default insurance benefit calculations are outlined below:
|Age Next Birthday||New Default Death calculation||New Default TPD calculation|
|16-25||$100,000 fixed||10% x salary x FYS*|
|26-29||10% x salary x FYS*||10% x salary x FYS*|
|30-34||15% x salary x FYS*||15% x salary x FYS*|
The new default insurance benefit calculations will apply to all new members who join the Plan from October 1, and to any existing members who choose to opt-in.
The default insurance benefit calculations for the following age categories remain unchanged:
|Age Next Birthday||Current Death and TPD calculation^|
|35-55||20.5% x salary x FYS|
|55-65||20.5% x salary x FYS|
*FYS - Future years of service to aged 65.
^Both your Death insurance cover and your Total and Permanent Disablement (TPD) insurance cover is calculated in the same manner, using the scale as outlined above.
How to amend your insurance?
To opt-in to the new insurance scale, complete Step 8, 9 or 10 (depending on your age bracket) of the ‘Adjusting your Insurance Cover’ form and post the form to: Alcoa of Australia Retirement Plan, GPO Box 4303, Melbourne, VIC 3001.
Before making changes to your insurance cover, you should seek advice from a financial adviser to understand the financial implications. You can call the Plan Helpline on
1800 355 028 with any questions you have, and for limited financial advice at no cost to you.
You can find more information about insurance cover in the Plan’s Product Disclosure Statements which are available on the Documents & forms page.
26 November 2019