He said the decision to include income protection as part of the default, rather than a separate option, was based on research among members which showed many were not aware that it was available to them but were keenly interested in having it.
Research undertaken by AIST and Industry Funds Forum found that 84 per cent of people prefer disability benefits paid as an income stream or combination of a lump sum and income stream.
“On that basis we have included it in the default, so it’s automatically provided to members, but of course there’s the option for those that don’t want it not to receive it,” Silk said.
Jim Minto, managing director of Tower Australia, said the company had restructured the group risk area and created a specialist team to look after corporate clients – typically schemes with less than $10 million of annual premium.
A dedicated team of more than 100 people, inclusive of the claims team and led by head of group risk business Andrew Boldeman, will look after AustralianSuper.
Minto said the team had been finalised, with key resources added in the last three months and further people to be added in future.
He confirmed the deal increased Tower’s ability to give smaller group clients a better deal.
“We’ve got a strong market position in that [corporate super] segment so we’re certainly looking to see benefits flow through,” he said.
Tower had invested heavily in technology and a new service platform with AustralianSuper, and was already working on online application with some schemes.
“What I said about three or four years ago was that the group market would end up being a small group of very large players utilising extremely strong technology capabilities and with very good business to business partnering with funds, and that more of that capability would be deployed in those funds,” he said.
“We certainly see that as being the future.”
The tender was run over six months and the fund was assisted by IFS Insurance Broking, Aon Consulting and consultant and actuary Jeff Humphreys of cHr consulting.