United Technologies Corporation Retirement Plan Insurance Guide Accumulation section 30 September 2017 Inside Your insurance benefits 2 Standard insurance 2 Insurance fees 3 Additional voluntary insurance 4 What is the fee for additional voluntary insurance? 6 When is medical evidence required? 7 What you need to know 8 Risks associated with insurance cover 9 How do I make a claim? 10 Special terms 10 Issued by Towers Watson Superannuation Pty Ltd (ABN 56 098 527 256, AFSL 236049) as Trustee of the United Technologies Corporation Retirement Plan (ABN 33 227 241 196) MySuper Authorisation number 33227241196186. UTC helpline 1800 628 849 1
Contact us The Plan Administrator UTC Retirement Plan PO Box 1442 Parramatta NSW 2124 Helpline: 1800 628 849 Email: utcsuper.australia@towerswatson.com Website: www.utcsuper.com.au You can also write to: The Advisory Policy Committee C/- Barry Singer Otis Elevator Pty Ltd 363 George Street Sydney NSW 2000 Important information The information in this document forms part of the Product Disclosure Statement (PDS) dated 30 September 2017 for the Accumulation section of the Plan. It should be read in conjunction with the other documents which form part of the PDS. You should consider that information before making a decision about the product or deciding whether your insurance is appropriate. The information provided in this PDS is general information only and does not take into account your particular objectives, financial circumstances or needs. It is not personal or tax advice. Any examples included are for illustration only and are not intended to be recommendations or preferred courses of action. You should consider obtaining professional advice about your particular circumstances before making any financial or investment decisions based on the information contained in this document. Information on tax and superannuation legislation is current as at 30 September 2017. The Trustee reserves the right to correct any errors or omissions. Information contained in this document that is not materially adverse is subject to change from time to time and may be updated if it changes. Updated information can be found at www.utcsuper.com.au. In addition, we will provide a hardcopy free of charge on request, if you contact the Plan s superannuation helpline on 1800 628 849. Your insurance benefits As an Accumulation member of the Plan, you are eligible for standard insurance cover that may provide an additional benefit on death, terminal illness or total and permanent disablement (TPD) if you are a UTC employee. Eligible members can also elect to take out additional voluntary insurance if you wish to top up your insurance cover. This document explains how the Plan s insurance works, including the terms and conditions which apply. If you die or become terminally ill or totally and permanently disabled while a member of the Plan, the Plan will pay a benefit equal to the total of your Accumulation account plus your insured benefit (if any). Eligible members may apply for additional voluntary insurance. The fee for your insurance will be deducted from your Accumulation account. Standard insurance The standard insurance benefit is a multiple of your salary determined at the previous 1 July or the date you join the Plan (if later). The multiple of salary is fixed according to a reducing scale as set out in the table to the right. For insurance purposes, all employees (including casual employees) are deemed to receive a minimum salary of $25,000 per year. This means that the standard minimum insurance for employees under age 55 is $50,000 (that is, 2 x $25,000). Information on your benefits during any periods of leave without pay is included in the Super Guide. 2 The UTC Retirement Plan Age next birthday at previous 1 July* Multiple of salary 55 or under 2.0 56 1.8 57 1.6 58 1.4 59 1.2 60 1.0 61 0.8 62 0.6 63 0.4 64 0.2 65 0 * For example, your insured benefit for the period from 1 July 2016 to 30 June 2017 will be based on your salary and your age next birthday as at 1 July 2016. Salary for insurance purposes is base salary, excluding commissions, bonuses, allowances and overtime. For Otis employees, however, Lift Industry Allowance is included.
Insurance fees The fees for the Plan s insurance for all members are shown in the table below. These are standard fee rates. If you are asked to provide evidence of good health, the insurer may impose a loading on the fee in respect of the cover being assessed. age LAST BIRTHDAY Annual fee per $1,000 of insurance Death and TPD cover $ Death only cover $ 15 0.69 0.56 16 0.69 0.56 17 0.69 0.56 18 0.69 0.56 19 0.69 0.56 20 0.67 0.53 21 0.65 0.49 22 0.63 0.46 23 0.61 0.43 24 0.59 0.41 25 0.57 0.38 26 0.55 0.36 27 0.55 0.34 28 0.56 0.34 29 0.57 0.33 30 0.58 0.33 31 0.60 0.33 32 0.63 0.33 33 0.66 0.34 34 0.70 0.35 35 0.74 0.35 36 0.79 0.36 37 0.85 0.38 38 0.93 0.40 39 1.02 0.42 40 1.14 0.46 41 1.28 0.50 42 1.44 0.54 * Only applies to additional voluntary insurance. age LAST BIRTHDAY Annual fee per $1,000 of insurance Death and TPD cover $ Death only cover $ 43 1.63 0.59 44 1.84 0.64 45 2.05 0.70 46 2.30 0.75 47 2.57 0.81 48 2.88 0.88 49 3.23 0.95 50 3.62 1.03 51 4.05 1.11 52 4.52 1.20 53 5.04 1.29 54 5.56 1.39 55 6.08 1.50 56 6.68 1.62 57 7.38 1.75 58 8.18 1.91 59 9.07 2.08 60 10.06 2.26 61 11.15 2.45 62 12.31 2.65 63 13.58 2.85 64 14.96 3.07 65 4.03* 66 4.60* 67 5.25* 68 6.00* 69 6.78* Example Bob is a permanent employee aged 40 receiving a salary of $50,000 a year with standard insurance for death and TPD of $100,000 (2 x $50,000). The total fee for Bob s standard insurance would be: $1.14 x $100,000 $1,000 = $114.00 a year After Bob reaches age 55, the total level of his insurance will reduce in line with the standard insurance scale shown on page 2. Therefore, when Bob is age 55, the standard insurance will reduce to 1.8 x salary. With Bob earning $50,000, his standard insurance would be 1.8 x $50,000 (=$90,000). The fee for Bob s standard insurance would be: $6.08 x $90,000 $1,000 = $547.20 a year UTC helpline 1800 628 849 3
Casual and part-time employees The standard insurance benefit applies for all employees, however, if you are working less than 15 hours per week, a different definition of TPD applies to you. See page 8 for the full definition. Casual employees are not eligible for TPD insurance. If you are working part time, you will be deemed to receive the full-time equivalent salary for insurance purposes. For example, if a member is working three days per week and earns $30,000 per year their insurance benefit will be based on a full-time equivalent salary of $50,000 per year (i.e. $30,000 x 5/3) as if they worked a five-day week. Additional voluntary insurance Additional voluntary insurance is paid as well as standard cover if you die or are eligible for a TPD or terminal illness benefit. Medical evidence is generally required when you apply for additional voluntary insurance. It may not be required if you satisfy the special conditions described on page 5 when a Life Event occurs. Insurance is available for death up to age 70. TPD insurance is available up to age 65. Casual employees are not eligible for voluntary TPD insurance. How much cover can I purchase? Additional voluntary insurance is available in units. If you are under age 55, each unit provides $50,000 of cover. The value of each unit of TPD cover reduces once you are over age 55, as shown in the table below. Each unit of death cover remains at $50,000, up to age 70. There is no limit to the number of units of additional voluntary insurance you may apply for, however, your total insurance under the Plan may not exceed $5 million for TPD cover. Age next birthday at previous 1 July Amount per unit for tpd Amount per unit for death 55 or under $50,000 $50,000 56 $45,000 $50,000 57 $40,000 $50,000 58 $35,000 $50,000 59 $30,000 $50,000 60 $25,000 $50,000 61 $20,000 $50,000 62 $15,000 $50,000 63 $10,000 $50,000 64 $5,000 $50,000 65 69 Nil $50,000 70 or over Nil Nil Example Allan is age 60 next birthday at the previous 1 July and successfully applies for two units of additional voluntary cover. This means Allan is covered for: 2 x $50,000 = $100,000 of death cover; plus 2 x $25,000 = $50,000 of TPD cover. This cover is in addition to his standard cover in the Plan. 4 The UTC Retirement Plan
When is cover available without medical evidence? Plan members have opportunities to purchase additional voluntary cover for death and TPD without the need for medical evidence if any of the following Life Events occur: Your marriage; Your dependent child starts secondary school; The birth of your child; Adoption of a child; or Taking out a mortgage or increasing your mortgage on your principal place of residence by at least $100,000 (excludes re-draw and refinancing). One additional voluntary unit of cover is available without medical evidence for each Life Event. Some conditions apply: You must apply within 90 days of the Life Event; and You must provide the required Proof of Life Event (see page 10 for details); and You may only apply once in any 12 month period, up to 3 separate occasions in total but only once ever for marriage; and You must not be aged over 55 years at the date of the Life Event; and You must not have previously been refused additional voluntary cover within the UTC Plan; and You must not have previously made a claim or been entitled to claim under any life insurance policy; and You may only apply once in respect of marriage; and Your standard insurance, plus all additional voluntary cover, cannot exceed $1.5 million; and Within the first six months, the increased amount is only payable if death or total and permanent disablement results from an accident. UTC helpline 1800 628 849 5
What is the fee for additional voluntary insurance? The fee for additional voluntary insurance is the same as the fee for standard insurance. The fee for each $1,000 of insurance depends on your age last birthday and is shown in the table on page 3. This is deducted from your Accumulation account in the Plan each month. How do I apply for additional voluntary insurance cover? To apply for additional voluntary insurance, you need to complete the Application and change form. The insurer will determine whether medical evidence is required and the Plan Administrator will send you the necessary information to complete. You may be required to complete a Personal Statement; however, more detailed medical or financial evidence may also be required, particularly for higher levels of cover. You should read the Duty of disclosure section of the insurer s forms carefully. If your application is accepted, the Plan Administrator will send a letter confirming the amount of insurance that has been accepted, the date that cover commences and any restrictions that apply. In certain circumstances, the Plan s insurer may apply a loading to the fee for additional voluntary insurance cover. If this happens, you will be given the option of accepting the increased fee or withdrawing your application for additional voluntary insurance cover. On leaving service, any additional voluntary insurance cover you have taken out, together with your standard insurance cover, can be converted to an individual policy under the normal continuation option terms and conditions described on page 9. Example Alice, a permanent employee aged 34, applies for $150,000 (3 x $50,000) of additional voluntary insurance for death and TPD. The total annual fee of her additional voluntary insurance is: $0.70 x $150,000 $1,000 = $105.00 6 The UTC Retirement Plan
When is medical evidence required? Standard insurance In most cases, medical evidence is not required to receive standard death and (if applicable) TPD insurance from the Plan. Medical evidence may be required if you: Were not Actively at work (see Special terms on page 10) on your first day of employment; or Have Plan insurance that exceeds $1.5 million; or Commence contributions to the Plan after previously exercising Choice of Fund to contribute to another fund during your current employment. Additional voluntary insurance Medical evidence is generally required when you apply for additional voluntary insurance. It is not required if you satisfy the special conditions described on page 5 when a Life Event occurs. Where medical evidence is required If medical evidence is required, the insurance cover being requested will not be available until the medical evidence has been assessed and the cover approved by the insurer. While medical evidence is being assessed, Interim Accident cover (see page 10 for details) is provided for a maximum period of 90 days. When accepting your insurance, the insurer may impose restrictions or exclusions on your cover, or charge extra fees. It may even decline your application for cover. If this happens, the Trustee may reduce your benefits under the Plan. You will be notified if this is the case. The insurer also has to examine any claims for death or TPD lodged by members and will require medical evidence to verify disablement claims. If the insurer does not accept your claim, your benefits under the Plan may be reduced. UTC helpline 1800 628 849 7
What you need to know How do I qualify for total and permanent disablement? To be totally and permanently disabled (TPD) you must satisfy the Trustee and insurer that you meet the TPD definition. Casual employees are not eligible for TPD cover. TPD is defined as follows: If you have been gainfully employed for an average of 15 hours per week for at least six months, then suffer an illness or injury and, as a result of that illness or injury, you are: totally unable to engage in any occupation, business, profession or employment for a period of six consecutive months; and determined by the insurer and the Trustee at the end of that six month period and certified by at least two medical practitioners, to be permanently incapacitated to such an extent as to render you unlikely ever to engage in any gainful occupation, business profession or employment, for which you are reasonably suited by education, training or experience. OR If you were gainfully employed when suffering an illness or injury and, as a result of that illness or injury, you: suffer a permanent impairment of at least 25% of whole person impairment as defined in the American Medical Association publication Guides to the Evaluation of Permanent Impairment, 4 th edition, or an equivalent guide to impairment approved by us; and are disabled to such an extent, as a result of this impairment, that you are unlikely ever again to be able to engage in any occupation, business, profession, or employment for which you are reasonably suited by your education, training or experience and at least two medical practitioners certify that to be the case. There may be other circumstances in which TPD benefits may be payable and full details are contained in the Plan s insurance policy. Slightly different circumstances apply if your insurance cover commenced before 1 July 2014. You can contact the Plan Administrator for more information. When does my insurance cover start? Standard insurance cover of up to $1.5 million starts from the date you start employment, provided that you: Join the Plan when you start employment; and Are Actively at work on the date you start employment. Where your standard insurance requires medical evidence for one of the reasons described on page 7, the cover that is subject to the medical evidence will 8 The UTC Retirement Plan not be effective until all required evidence has been provided and your application is accepted by the insurer. While the evidence is being assessed, Interim Accident cover will apply for up to 90 days (see page 10 for details). Additional voluntary insurance starts when we advise you that your application for voluntary insurance has been accepted. While your application is being assessed, Interim Accident cover will apply for up to 90 days. When does my insurance cover stop? Your insurance benefit payable in the event of your death, terminal illness or total and permanent disablement is insured through a policy with the Plan s insurer. If insurance cover for you ends, or if the Plan s insurer does not agree to provide insurance cover for any reason, or if your insurance claim is declined, your benefits under the Plan may be reduced accordingly. It is therefore important to understand the circumstances under which your insurance cover will stop. While you remain employed by the Company, your insurance cover will stop if: You stop Company contributions to the Plan by choosing another fund for future Company contributions. Cover stops on the first day of the period for which Company contributions are due to be made to another fund; You reach age 70 (for death only additional voluntary insurance cover); You reach age 65 (for standard death cover and all TPD and terminal illness cover); Your account has an insufficient balance to pay your monthly insurance fee. Cover will stop at the end of the month following the month your account balance becomes too low. Your insurance cover will also stop on the day before you commence service in the armed forces of any country. Insurance cover will continue for up to 24 months if you are Actively at work but on employer-approved leave of absence or parental leave, providing you do not join the armed forces and insurance fees continue to be paid. Extension of cover If you leave the Company before age 60, the Plan will continue insurance cover for death and TPD until the earliest of: The day you begin working for another employer; The day you take out an individual insurance policy under the Plan s continuation option; The date a death, terminal illness or TPD benefit is paid for you or your beneficiaries; You die;
26 weeks after employment ends (in the case of death cover only); or 60 days after employment ends in the case of TPD and terminal illness cover. During your extension period, your insurance cover will be equal to the insurance amount you (or your beneficiaries) would have received from the Plan if you had died or became totally and permanently disabled or terminally ill on the day your employment ended. Death cover during the 26 week extension period will not be paid in the event of suicide. Can I continue my insurance cover after I ve left the Company? When you leave the Company, you may have the opportunity of continuing the death and TPD cover you had as a member of the Plan without the need to provide evidence of good health. To do this you need to purchase an individual insurance policy through the Plan s insurer. You will only be able to apply for the same level of cover or less than you had on the day you left the Company. The fees for this policy will be based on the insurer s current retail premium rates and will be different to those you paid while a member of the Plan. To be eligible to take advantage of this continuation option, you must satisfy the following conditions: You must apply within 60 days of leaving employment; You must be less than 60 years of age on the date that is 60 days after leaving employment; You must have ceased employment (choosing another superannuation fund while still employed with the Company does not qualify); For TPD insurance you must commence full-time employment in an acceptable, insurable occupation within 90 days of ceasing employment; You must not have joined the armed forces; You must not have received, nor be eligible to receive any benefits under the Plan s insurance policy or similar payments under any other policy; You must be an Australian resident or holder of a visa and not residing outside Australia; You must not have previously taken out a continuation option with the Plan s insurer; and You must not have ceased employment with your employer due to disability. If you take out an individual policy with the Plan s insurer, no medical evidence will normally be required. However, any restrictions, loadings or other special terms that applied to your cover while you were a member of the Plan will continue to apply to the individual policy. You must also satisfy the insurer s criteria in relation to occupation, pastimes, smoking status and residency status. For more information on continuing your insurance cover when you leave the Company, contact the Plan Administrator. How do I change my insurance cover? You can opt out of standard insurance cover (both death and TPD) at any time by writing to the Plan Administrator. You can also choose to opt out of your standard TPD cover only, retaining your death cover. You cannot opt out of death cover and retain only your TPD cover. You can reduce or cancel your additional voluntary insurance cover at any time by completing the relevant section on the Additional voluntary insurance form available from the website. Risks associated with insurance cover The Trustee uses an insurance policy to meet the insurance benefits payable on death or total and permanent disablement. If the insurance company imposes restrictions or special conditions on your insurance or refuses to pay a claim, the Trustee has the power under the Trust Deed to adjust your benefits. As a result, there are a number of risks associated with the restrictions and special conditions that may be imposed by the insurance company. These include: The risk that you may suffer an injury or illness such that you cannot work, but are not sufficiently injured or ill to satisfy the Plan s definition of disablement. In this case, the TPD benefit will not be paid. The risk that, even if your claim is accepted, it may take some time for payment to be made. For example, it can take some time to obtain all the required information to assess the claim. The risk that the insurer may refuse to provide cover in certain circumstances, for example, if you commit suicide or intentionally injure yourself, or make a claim caused by war. The risk that the maximum amount of cover allowed under the policy may be insufficient to meet your needs. The risk that the insurance company may decline (or defer) your cover, which may also affect your ability to obtain insurance cover in the future. The risk that the insurance company may not provide cover if you are required to work overseas. UTC helpline 1800 628 849 9
How do I make a claim? To make a total and permanent disablement claim or a terminal illness claim, you should contact the Plan Administrator to obtain the appropriate forms. It is in your interests to lodge your claim as soon as possible. The Trustee may require you to undergo one or more medical examinations in order to determine whether you satisfy the definition of total and permanent disablement (see page 8). It can take some time to obtain all the required information and/or arrange appointments for medical examinations. This means that it may be some time before your claim is finalised by the Trustee, and, if it is accepted, for payment to be made. You will be kept informed of the progress of your claim. Special terms Actively at work means you are actively performing all the duties of your usual occupation, working your usual hours free from any limitation due to illness or injury and not in receipt of and/or entitled to claim income support benefits from any source including worker s compensation benefits, statutory motor accident benefits or disability income benefits (including government income support benefits). Interim Accident cover will commence on receipt of an application for cover and pays a benefit where total and permanent disability or death is the result of an accident. The Interim Accident Benefit will be the lesser of the benefit being applied for and $1.5 million. Interim Accident cover will expire on the earliest of: 90 days after the commencement of the Limited cover; The date on which the insurer gives notice that your request for insurance is accepted or declined; The date you cancel or withdraw your request for insurance; or The date you cease employment. No Interim Accident Benefit will be payable: For injury caused by engaging in hazardous pastimes or sports that would not be covered under the insurer s normal assessment guidelines; For injury resulting from an intentional act or omission; For injury occurring prior to the date of becoming eligible; If the cover applied for would have been declined under the insurer s normal assessment guidelines; or If you lodge a claim for an event or condition that would have been excluded under the insurer s normal underwriting process. The insurer will not pay more than one benefit under this Interim Accident cover for any one accident to any person. Proof of Life Event The following documents are required to provide proof of a Life Event: Marriage: Dependent child starts secondary school: Birth of Child: Adoption: Mortgage: Marriage Certificate Letter of admission Birth Certificate Certificate of Adoption Loan document or other supporting evidence from the mortgage lender Terminal Illness means an illness or injury that in the opinion of at least two medical practitioners (one of whom the insurer may elect and require to be a specialist physician) is likely to lead to the death of the insured member within 12 months from the date of diagnosis. Insurance Guide Accumulation section Version 10, 30 September 2017 10 The UTC Retirement Plan 10