Rice Warner has urged the Government to reconsider making insurance in superannuation an opt-in product for active members with less than $6000 in their accounts.

Almost all new fund members will have no life cover unless they opt in, the actuaries group says in a submission to the Senate committee examining the proposal and other super reforms.

“We consider [the opt-in model] has significant consequences for members, funds, insurers and administrators and is not needed,” Rice Warner says.

“For many, they will have no life insurance until their balance is transferred from another fund. If the member dies or becomes disabled during this time, the member and their family could be severely disadvantaged.”

Rice Warner supports the super reform objectives, but notes some proposals can be further improved. It suggests the start date for changes – July 1 next year – be deferred so funds have more time to negotiate contracts with insurers.

It also recommends that the Australian Prudential Regulation Authority be given powers to exempt some funds and employers from certain requirements.