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Claims MySuper is endangering insurance balances
The MySuper framework offers no recourse to randomly transitioned fund members who stand to lose previously-accrued insurance balances, Corporate Super Specialist Alliance (CSSA) argues.
With the transition already beginning, CSSA treasurer Gareth Hall said more needs to be done to alert members of their potential losses.
“We believe many members are not aware of the problem and consequently are losing millions of dollars in insurance cover, cover which they may never be able to obtain again.”
“How can any Government legislate the removal of such important benefits from taxpayers, and offer them absolutely no avenue for compensation?”
Ex-corporate super members are given the chance to state whether they want to retain their super arrangements, but Hall said he knows of at least one member who almost missed the opportunity to opt out of the transition.
“If this member had been arbitrarily transitioned into a MySuper fund, his current insurances would have been cancelled,” Hall said.
“Our gravest concern is what will happen to members who are not engaged. What if they have changed address or are on leave and are not able to be contacted? They will just lose out,” Hall said.
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The future of superannuation policy remains uncertain, with further reforms potentially on the horizon as the Albanese government seeks to curb the use of superannuation as a bequest vehicle.
Superannuation funds will have two options for charging fees for the advice provided by the new class of adviser.
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
APRA’s latest data has revealed that superannuation funds spent $1.3 billion on advice fees, with the vast majority sent to external financial advisers.
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