New research conducted by MLC Life Insurance has revealed 60% of super fund members have not heard of the government’s stapling reforms, potentially leaving them with inadequate or no insurance cover should they change jobs.
Introduced in November 2021 under the Your Future, Your Super measures, the stapling reforms require employers to make superannuation contributions to an existing fund (the ‘stapled’ fund) for new employees, unless the employee opts otherwise.
…super funds and their insurers must do better to explain the reforms to their members
As more than 70% of Australians hold Life and TPD insurance in their super fund, MLC Life Insurance Chief Group Insurance Officer, Mark Puli, said super funds and their insurers must do better to explain the reforms to their members.
“It’s disappointing to see most members are unaware of stapling. We understand and support the intent of these changes – to reduce the number of Australians with multiple superannuation accounts – but in practice, it means people won’t have the right cover for their circumstances,” said Puli, who added:
“The average Australian changes jobs 12 times throughout their lifetime. In that time, they may get married, have kids, buy a home, and take on more debt. It’s imperative that members have the right cover for their needs and if they aren’t prompted to review it, they simply won’t.”
The research, which surveyed more than 1,500 superannuation members, also revealed that 83% of members said their insurance through superannuation was important, but only 42% ever review their cover. The research also revealed 43% of members don’t think they have the right cover for their circumstances.
Puli noted that “As regulatory change reshapes the industry, putting more onus on members to make an active choice about their protection needs, life insurers and superfunds must redouble their efforts to lift member engagement”.
The insurer’s research also highlights that:
- The knowledge gap is still too large
- Members want more guidance and support from their superannuation funds
- Personalising insurance cover increases loyalty
Click here to access the full report from MLC Life Insurance.