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Employers in dark over insurance premiums
Many Australian businesses are ill-prepared for impending increases in the employee insurance premiums.
This is the finding of Aon Hewitt's Superannuation and Insurance Pulse Survey, which found just 38 per cent of organisations have been told their group life insurance premiums will go up.
But even among those who have told, more than half (52 per cent) do not know how much the increase will be.
"Many organisations are unaware that premium increases are on the cards because they have premium guarantees in place," principal and actuary Ashley Palmer said.
"They may therefore not be informed of the likely increases in premiums by their insurer or super fund until the guarantee is due to expire."
The survey found only 31 per cent of businesses allots extra funds in addition to the remuneration review budget to accommodate the super guarantee (SG) increase to 9.5 per cent.
Only 28 per cent allotted funds from within the remuneration budget, while for 18 per cent of organisations, their employees absorbed the cost under a total remuneration package.
Over half (56 per cent) of businesses said they would eventually have to give up their market leading positions at some point to be paying at the SG rate.
Only 25 per cent of employers who currently pay above the guaranteed level said they would continue to raise their super at the same rate as the SG.
"When you think about the effect of MySuper and the insurance changes together, it is astounding that nearly 40% of organisations have no intention of undertaking a review of their corporate superannuation and insured benefit arrangements to understand the possible effects," Palmer said.
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