Industry super fund Cbus has again flagged its concern over proposed legislation that will put an end to working Australians having multiple superannuation accounts.

The so-called “stapling” measure, which the Government says will save workers from paying unnecessary fees and group cover premiums, could put vital insurance protection at risk, according to Cbus.

Under the planned measure as outlined in the draft bill, employers will be required to make contributions to an existing fund of new employees unless they decide otherwise.

And if new employees do not decide on a new fund, employers are no longer allowed automatically to create a new super account in their chosen default fund. Employers instead have to obtain information about the employee's existing fund from the Australian Taxation Office, if it is not provided.

Cbus says it is concerned that the availability of insurance for workers in hazardous occupations is now at risk of being undermined with the stapling proposal in the proposed Treasury Laws Amendment (Your Future, Your Super) Bill 2021.

Cbus is a bespoke fund for the building and construction industry with some 758,204 members.

“If a construction worker is ‘stapled’ to a fund they joined at their first job, they could be paying for insurance that won’t cover them if they’re seriously injured,” CEO Justin Arter said.

“Many Cbus insurance claims are from workers in their first year on the building site when they are new to the industry and at higher risk.”

The bill has been referred to the Senate Economics Legislation Committee for inquiry after a second reading in parliament. The Committee has extended its reporting deadline by seven days to Thursday.

Mr Aster says the bill “should be rejected” by the Senate Committee.

“The recent hearings exposed that the issues with it are too many, and far too serious to be resolved via tinkering,” he said. “If passed, it could leave 2.7 million people - 20% of our working population - who work in in hazardous occupations worse off.”

The introduction of stapled accounts is a recommendation of the Hayne royal commission and a Productivity Commission superannuation inquiry.

“Holding multiple accounts is costly for members,” Treasurer Josh Frydenberg said in Parliament when he moved for the bill to be read a second time in February.

“The Government believes new super accounts should no longer be automatically created every time a worker changes jobs when they do not decide on a superannuation fund.”