Some superannuation members in dangerous jobs may be left uninsured in a workplace accident if their superfund decides it is too difficult to apply an exemption in recent super insurance legislation, according to a new paper.

The Putting Member’s Interests First bill exempts workers in dangerous jobs from opt-in insurance. However, thinktank Rice Warner warns it will be notoriously difficult for superfund trustees to identify its members’ occupations.

Superannuation administration system SuperStream has an occupation field for employers to complete, but it is optional. The trustee may decide that it cannot seek an exemption from the legislation if it can’t accurately identify members in dangerous jobs, the paper warns. Such exemptions must be sought in writing.

Rice Warner says superfunds need to try and reduce the risk that members were misclassified, or if members are not recorded as working in dangerous fields. This is a potential high-risk area for administration errors.

“The actual certification process is a new concept and will require some careful consideration,” the paper says. “It is fair to say that data does currently not exist that meets the exact requirements of the Act.”

The bill stipulates using information from the most recent five years when certifying that the job is in the riskiest quintile of Australian occupations, but claims data often has a few years’ time lag.

Opt-in rates for young members and low-account balances have been some of the lowest experienced across the industry. Default insurance must be opt-in for members under 25 or for balances of $6000 or less from April 1 2020.

It will be a challenge for funds to consider and execute exemptions in time for this deadline, Rice Warner says.