Default Superannuation Changes
Will your employees be left without death and disability insurance?
Superannuation has undergone many changes. With all of these changes, it’s even more important for employers to understand how these changes could impact their insurance offering to employees.
54% of firms have not reviewed their default superannuation provider in the last two years^
Protecting Your Super (PYS), Putting Members' Interests First (PMIF) and Your Future, Your Super (YFYS) legislation means your new employees will no longer automatically join your default super fund or receive the attached death and disability insurance cover.
Employees' existing super fund will follow them from one employer to another unless they actively opt-in to your default. As a result, some employees may not receive the death and disability insurance cover offered through your default super fund if they remain with their previous employer’s fund and in addition where employees pay for the cover even if they join your default fund cover may not be provided immediately (unless they opt in) if they are under age 25, have a low account balance and cover will cease if the fund doesn’t receive contributions for a period of 16 months.
Employers who currently offer insurances inside super as part of an overall financial wellbeing strategy may need to consider the implications of not all employees being inside their default fund. There is a risk that employers do not have oversight on whether employees hold appropriate insurances, or the extent to which their employees’ entitlements to death and disability insurance are harmonised.
Aon can help you review your default superannuation fund and build an attractive and inclusive insurance benefits program that meets your goal of keeping people financially well and productive, and providing you with the comfort of knowing your employees are covered. We’ll assist in identifying appropriate insurance placement solutions for your workplace, managing the transition, educate your employees regarding their options and providing ongoing administrative and technical support.
^ Aon’s 2023 Superannuation and Financial Wellbeing Survey, October 2023.