Four large industry superannuation funds have been reprimanded by the corporate regulator for not clearly outlining how much insurance cover clients will lose if they leave to go to another fund.
Australian Retirement Fund, Health Super, N M Superannuation and Qantas Superannuation were ordered to provide an audited statement to the Australian Securities and Investments Commission (ASIC) proving they have rewritten their product disclosure statements to better inform consumers about the value of death and disability benefits in their products.
ASIC has also requested the documents of all four funds be changed to include more adequate disclosure information for clients on how they can pursue complaints against the funds.
All four funds have cooperated and will not face any harsher penalties.
Since choice of fund legislation was introduced concerns have been raised that many members might lose access to lower premiums generated by pooled insurance arrangements if they switched to another fund.
“It is important that members are clear on what insurance benefits they lose and may need to replace when they change funds. It is also important that they know what avenues to pursue with any complaints,” ASIC executive director of enforcement Jan Redfern said.
The non-compliance of the four funds was discovered by ASIC during its Superannuation Inquiries and Complaints Project.
