B6 Mercer Superannuation Trust


At 31 December 2017, the Plan has 2,435 members comprising 995 ‘actives’ and 1,440 pensioners. The corresponding figures for 2014 were 2,579 members; 1,151 ‘actives’; and 1,428 pensioners. Within the defined benefit section, 122 members retired during the triennium with 14 new members commencing contributions. This small number of new defined benefit members is discussed later in this report.


As advised in the report to the Fourteenth Assembly, the Standing Committee, on the advice and recommendations of the then Trustee, approved a change of trustee of the Beneficiary Fund from Benefund Ltd to Mercer Superannuation (Australia) Ltd (MSAL) with effect from 1 July 2015. From that date, the fund became a plan within the Mercer Super Trust. The transfer process is now complete.

In conjunction with the change of trustee, administration of the plan was transferred to Mercer Outsourcing (Australia) Pty Ltd, a specialist superannuation administration arm within the Mercer organisation. The Beneficiary Fund Plan has its own dedicated Mercer team available to handle telephone and online enquiries. In addition, a Minister Care Advocate (MCA) has been placed in each mainland capital city. The role of the MCA is to be available to meet with individual members as required and to liaise with Synod officers to facilitate resolution of any issues affecting members, contributions or other administrative matters.

A major consideration in the change of trustee and administration of the Beneficiary Fund was the potential to achieve cost savings through the benefit of scale as one of many sub-plans within the Mercer Super Trust. After two full years, it has now been confirmed that operating and administration costs are almost 50 per cent less than costs incurred by the previous Trustee.


Superannuation law requires that where an independent body acts as trustee for a plan within a master trust and the number of members is 49 or more, the Trustee must establish a Policy Committee. Members of the Policy Committee are appointed by the Assembly Standing Committee in accordance with procedures agreed between MSAL and the Assembly, to ensure the Plan meets Equal Representation Rules.

The Policy Committee meets three times per annum to receive reports on the investment performance and the administration of the Plan. The Policy Committee is a reference point for Mercer in matters of communication with members and their pastoral concerns. The Committee also monitors the services provided to members and acts as a reference point for Mercer in relation to improvement in service provision. At the suggestion of the Policy Committee a pilot program is currently underway in the Synod of Victoria and Tasmania offering a pre-retirement seminar for ministers and partners with a view to expansion to other Synods during this year.


As part of the process of changing trustee, it became apparent that a number of powers and responsibilities assigned to Benefund Ltd by the Assembly in the Rules of the Fund were outside the scope of the normal responsibilities of a trustee. The exercise of these powers relied on the knowledge and understanding of the structure and operation of the Uniting Church in conjunction with the understanding of superannuation legislation and administration. It was deemed that the members of the Policy Committee were an appropriate group to undertake these tasks but a separate charter was required to formally acknowledge the delegation of the powers from the Assembly.

The charter prescribes that the members of the Employer Committee are the members of the Policy Committee. The Employer Committee must appoint one of its members as the Employer Committee representative who acts as a single point of contact with Mercer for communication between Mercer and the Employer Committee and where necessary or appropriate, the Assembly.  This has proven to be a valuable arrangement enabling timely responses to Mercer while also providing a reporting channel back to the Assembly as the “Employer Sponsor” of the Beneficiary Fund in the Mercer Super Trust.


The financial status of the Plan is a key characteristic for both members and the Assembly. The standard industry measure for financial status of a defined benefit pension plan is the Vested Benefit Index (VBI). A VBI of 100 indicates that, at the time of valuation, the assets of the plan are sufficient to meet 100% of its current accrued liabilities at that date. A feature of the Uniting Church Beneficiary Fund Plan is a provision for annual pension increases linked to movements in the Consumer Price Index (CPI). The level of increase is determined after annual financial results are known and measured as a proportion of CPI at a level which ensures the VBI does not fall below 100. Shortfalls in allocation of the full CPI are accumulated and where investment performance allows, a pension increase greater than the CPI rate may be applied.

The second assessment of financial status of the Fund is through actuarial review. Actuarial reviews are conducted on an annual basis in accordance with the requirements of SIS legislation and the Australian Prudential Regulation Authority (APRA). From the most recent review at 30 June 2017, the actuary has confirmed that the Uniting Church in Australia Beneficiary Fund Plan is in a sound financial position with sufficient assets to meet its long-term pension liabilities.


As part of its 2015/16 Budget, the Commonwealth Government determined to cap the deductible amount for holders of defined benefit income streams to 10 percent with effect from 1 January 2016. While this change did not affect pension amounts paid from the Beneficiary Fund, it did have a significant financial impact for most members of the Fund receiving pensions from the Department of Human Services.

The Standing Committee registered its protest about the change with the Minister for Social Services and appointed the Chair of the Employer Committee to pursue the matter on behalf of the members of the Fund.

Following direct representation, the Minister authorised a review of the structure and arrangements within the Beneficiary Fund by the Department of Social Services. This process extended over several months of consultation and submission including work by the Fund Actuary.

In December 2016, the Minister advised that, having considered the information provided, he had decided that a different treatment for members of the Uniting Church defined benefit scheme to those of other schemes was not warranted.


The defined benefit section of the Fund comprises members in three categories. The first and second categories were closed to new members in 2004. From that time no defined benefit options were available and all new members established accumulation accounts. Following extensive research and consideration, the then trustee of the Fund proposed a new defined benefit category in 2012 with redefined benefits. The proposal was adopted by the Assembly Standing Committee. Actuarial advice on the sustainability of this new category was based on a take-up rate of 20 new members each year.

Those persons who had joined the Fund since 2004 were given a one-off option to transfer to the new defined benefit category. This provided an initial influx of around 100 members in this category. In the last three years only 14 new members have taken up membership.

Over the next ten years, the number of defined benefit contributors is expected to decline significantly. The Employer Committee has initiated a review process for the long-term sustainability of the Plan and to ensure that benefits for retired ministers are maintained while also ensuring minimal financial risk for the Church.

Rev. Robert Elkhuizen
Chair Policy Committee

Bruce Binnie
Chair Employer Committee