At least four corporate superannuation clients of AMP Limited have started the process of testing the market for new default superannuation fund providers.
One of AMP’s largest corporate superannuation clients, Australia Post was in early April reported to be considering its future arrangements with AMP after facing pressure from unions representing its employees, including the Communications Workers Union.
That pressure followed AMP’s appearance at the first round of hearings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and subsequent revelations during hearings focused on superannuation and insurance have contributed to client concerns.
Money Management has been told that a further three corporate fund clients of AMP were also reviewing their arrangements.
The reviews come despite AMP announcing in late July that it was it was reducing a range of fees within its superannuation business as part of its strategy to “reset the business”.
Sitting at the heart of the AMP fee changes were reductions to its flagship MySuper products set to come into effect in the third quarter of the current financial year.
The reviews being undertaken by AMP’s corporate superannuation clients also come as the Royal Commission has posed the question of whether superannuation licensees should be prohibited from engaging an associated entity as the fund’s group life insurer – something which would have a significant impact on AMP life insurance business.
The insurance company has joined this year’s awards as a principal partner.
The $135 billion fund has transitioned away from TAL Life Insurance following an “extensive tender process”.
The $80 billion fund is facing legal action over allegedly signing up new members to income protection insurance by default without active member consent.
In a Senate submission, the Financial Services Council has once again called for further clarification that the government will assess the consumer outcomes of group insurance against the enshrined objective of superannuation.