Choice to threaten fund member insurance
The new choice of superannuation fund regime will need to be handled carefully due to the risk of employees losing valuable benefits if they switch funds, delegates at this year’s showcase event for superannuation funds have been warned.
In an address to the Association of Superannuation Funds Australia national conference in Adelaide yesterday, MLC general manager, protection solutions Greg Einfeld suggested there was a definite risk that switching funds would increase the cost of insurance to employees.
He said the implementation of the new choice of fund regime will provide insurers with an opportunity to provide advice and solutions to clients but that it would not be without its challenges.
Einfeld suggested that an alignment of benefits between funds offered by employers would ensure switching did not impact on insurance arrangements.
“With the introduction of choice in July 2005 employers can introduce education and advice programs to help ensure their employees choose a suitable fund and have adequate protection and retirement savings in place,” Einfeld told conference delegates.
“Employers should educate their employees about insurance and provide access to planners for their employees to seek financial advice specific to their individual needs.”
Einfeld also suggested that employers need to ensure the process of applying for cover was transparent for employees.
AUTHOR
Mike Taylor
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