CSSA treasurer Gareth Hall said part of the MySuper legislation requires ‘flipped members’ to be transitioned to a MySuper fund by 1 July 2017.
The concern for CSSA is that members will lose out on insurances and policies that they have selected with their original super funds.
“We believe many members are not aware of the problem and consequently are losing millions of dollars in insurance cover, cover which they may never be able to obtain again,” said Mr Hall.
“Our gravest concern is what will happen to members who are not engaged,” he added.
Mr Hall said APRA has told at least one fund that member accounts which are receiving ongoing contributions have to be transitioned to MySuper now.
“It does not make sense that the first people being transitioned into a MySuper arrangement are those who are the most engaged,” he said.
Mr Hall explained that before the introduction of MySuper legislation, the death, total and permanent disability, and salary continuance insurance arrangements of members transferring from an employer plan remained intact with personal accounts, as did the member’s investment selection.
“Despite our having brought this issue to the attention of both the Labor and Liberal governments on a number of occasions, the recommendations from the senate committee do not address the issue, nor do they address the conflicted remuneration dilemma that results from corporate superannuation specialists providing advice to their clients,” Mr Hall added.
