Posted on 22/09/2020
Super funds don’t just provide superannuation. Most, including Statewide Super, also provide their members with some insurance options too.
Death (including terminal illness), Total and Permanent Disablement (TPD) and income protection insurance are the most common types of insurance offered by super funds, and are designed to give members peace-of-mind should something unexpected happen.
Earlier this year, legislative changes to insurance within super, impacted new and existing employees.
Previously, when you paid your employees’ superannuation to Statewide Super, they were automatically provided with a default level of insurance cover.
The Putting Members’ Interests First (PMIF) legislation, which took effect from 1 April 2020, means that your employees may not automatically be provided with insurance cover upon joining Statewide Super. This could have also impacted your employees who previously held insurance through their superannuation but may have lost it due to the changes.
Here’s what this legislation means for you, and your employees.
The Putting Members’ Interests First (PMIF) legislation
The PMIF legislation was designed by the Government to protect the retirement savings of Australians and aims to ensure that your employees’ superannuation balances are not unnecessarily eroded by insurance premiums.
The reforms do this by requiring superannuation funds to only provide insurance on an “opt-in” basis to new members who:
- have a superannuation account balance of less than $6,000 (the balance condition); or
- are under 25 (the age condition).
New members aged under 25, or who have an account balance of less than $6,000, can ‘opt-in’ to be provided with default insurance prior to meeting the above criteria - otherwise, insurance will be activated when the age and balance conditions are met (subject to additional criteria).
What does this mean for you?
When inducting new starters at your workplace, encourage them to clarify their insurance arrangements with Statewide Super, or their super fund of choice.
Employees can find out what insurance they have in their super by:
- calling their super fund
- accessing their super account online; or by
- checking their annual statement and the super fund’s Product Disclosure Statement.
The Product Disclosure Statement explains who the insurer is, details of the cover available and conditions to make a claim.
All Statewide Super members can check their insurance status online via Statewide Super Online, our online member portal.
For more information
If you would like to discuss this change, or learn more about how Statewide Super can help educate your new and existing employees about their super and insurance cover arrangements, contact our Business Development team today.