{"id":27692,"date":"2014-10-09T19:35:32","date_gmt":"2014-10-09T08:35:32","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=27692"},"modified":"2014-10-13T19:37:06","modified_gmt":"2014-10-13T08:37:06","slug":"mysuper-transfer-threatens-insurance-entitlements","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2014\/10\/09\/mysuper-transfer-threatens-insurance-entitlements\/","title":{"rendered":"MySuper Transfer Threatens Insurance Entitlements"},"content":{"rendered":"

The mandatory transfer of personal superannuation accounts to MySuper will result in thousands of people losing insurance entitlements attached to their superannuation, the Corporate Super Specialist Alliance (CSSA) has warned.<\/span><\/p>\n

<\/p>\n

\"CSSA<\/a>
CSSA President, Douglas Latto<\/figcaption><\/figure>\n

Legislation brought in under the Stronger Super regime requires that all super fund members in a default investment option must be transitioned to a MySuper fund by 1 July 2017. Super funds must notify members if their account will be transferred, but the transfer is automatic. Unless the member notifies their fund within a set time period that they do not wish to be transitioned, their account will be moved.<\/p>\n

The CSSA has argued that the transfer could see fund members lose their existing insurance cover, because they fail to \u2018opt-out\u2019 of the transition.<\/p>\n

\u201cNot only will people lose the insurance cover attached to their previous super funds, they will also have no legal recourse to pursue for their loss,\u201d said CSSA president, Douglas Latto<\/strong>. \u201cThis is because MySuper legislation contains immunity for the trustees. Consumers cannot sue the trustee because the trustee is protected by legislation passed by the previous Government.\u201d<\/p>\n

Mr Latto said the transfer of some funds had already begun, and stories were emerging of members who have lost benefits, and been unaware of the consequences.<\/p>\n

The last thing we want to see is destitute families who have belatedly discovered that they have lost the insurance they expected to rely upon<\/h6>\n

\u201cWe have already heard some terrible stories,\u201d Mr Latto said. \u201cOne person\u2019s insurance was reduced from $1,673,000 to $60,000, others have had their cover cancelled completely. With most of the transition still to take place, the damage has only just begun.<\/p>\n

\u201cThe last thing we want to see is destitute families who have belatedly discovered that they have lost the insurance they expected to rely upon following the death or disability of a family breadwinner.\u201d<\/p>\n

\"AFA<\/a>
AFA CEO, Brad Fox<\/figcaption><\/figure>\n

Association of Financial Advisers (AFA) CEO, Brad Fox<\/strong>, added his Association\u2019s voice to the concerns:<\/p>\n

\u201cAn \u2018opt-out\u2019 approach pre-supposes that the member understands the letter that is sent from their fund, and the consequences of the transfer,\u201d Mr Fox said.<\/p>\n

\u201cConsumers just aren\u2019t aware that this transfer is happening, and I think, sadly, that they will only understand that their benefits have been reduced after they\u2019ve been transitioned, when it\u2019s too late.\u201d<\/p>\n

Both the CSSA and AFA are lobbying Government to make the transition an \u2018opt-in\u2019 process, rather than \u2018opt-out\u2019.<\/p>\n

\u201cSuper funds need to outline to members the benefits within the new MySuper account, as well as what they will forgo if they transfer,\u201d Mr Fox said.<\/p>\n

\u201cAt the moment, it is quite clear that the best interests of many super fund members are not being met and unless we make MySuper \u2018opt-in\u2019, we will have a serious problem when claims arise,\u201d Mr Latto added.<\/p>\n","protected":false},"excerpt":{"rendered":"

The mandatory transfer of personal superannuation accounts to MySuper will result in thousands of people losing insurance entitlements attached to their superannuation, the Corporate Super Specialist Alliance (CSSA) has warned.<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,5622],"tags":[],"class_list":["post-27692","post","type-post","status-publish","format-standard","category-compliance-regulation","category-superannuation"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/27692","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=27692"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/27692\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=27692"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=27692"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=27692"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}