Australian superannuation funds must develop insurance offerings for MySuper and choice products while rationalising their insurance product model, says Peter Rowe, general manager of business operations at VisionSuper.
“Insurance is quite often forgotten by trustees but it needs to be addressed,” says Rowe.
He says there is no “structured framework” to address superannuation members’ insurance needs for MySuper and choice products.
“You have to rationalise the product model, change it dramatically,” says Rowe.
Superannuation funds will also have to grapple with as many as 10 million surplus superannuation accounts that potentially have no insurance, he says.
Some members have two or more superannuation funds and two or more insurance covers, says Rowe.
“We have to make sure we make rules around auto-consolidation that are not too complex,” he says.
VisionSuper is the superannuation fund for local government, community services and water industry workers. It has about 100,000 members and about $4 billion in assets.