legalsuper clinches insurance freeze deal
Industry superannuation fund legalsuper has negotiated a three-year premium freeze with its insurer OnePath following a review of its member insurance offering last year.
The changes will be announced to members legalsuper's February mid-year report.
The premium freeze comes when most other super funds are increasing premiums due to price competition, greater capital requirements and late claims reporting.
legalsuper's chief executive Andrew Proebstl said that as an industry fund with a niche membership, legalsuper was a low risk group of white collar legal professionals.
"As a white collar profession most of our members are in a low risk insurance category, which lowers premiums and maximises the insurance benefits available to our members," he said.
Other than the premium freeze, legalsuper members will have access to other improved insurance benefits including unlimited death cover (previously $3 million), higher TPD cover to $3 million (up from $2 million), higher terminal illness benefit to $2 million (from $1 million) and higher maximum income protection to $25,000 (from $20,000).
Proebstl told Money Management one of the challenges legalsuper faces in 2014 is implementing the changes around MySuper over a relatively short period of time.
This would mean increased cost as there was less time to plan for and implement changes in the most efficient way.
Proebstl also said additional reporting requirements have added "layers of additional costs" both to the custodian and the fund administrator.
"I would want to emphasise that I don't see a problem with change per se or the costs associated," he said.
"It is just that it is important that change is conceived to comprehensively address issues and then implemented efficiently, ultimately to minimise cost and improve processes for the benefit of members."
But Proebstl added the benefits of the changes would only manifest themselves itself over the longer term.
"I guess the costs need to be seen in a context of what they do for the longer-term environment.
"I think the funds have a responsibility to make sure that they go about implementing the changes in an efficient way and they're pragmatic in what they do."
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