Most superannuation fund trustees and executives believe adherence to the insurance inside superannuation fund code of conduct should have been made compulsory.
Just weeks after the final report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, a survey conducted by Super Review at the recent Conference of Major Superannuation Funds (CMSF) revealed strong support for a compulsory and enforceable code.
Importantly, the survey’s findings came at the same time as the Australian Institute of Superannuation Trustees (AIST) used the CMSF conference to signal a move to a compulsory code.
The Super Review survey revealed 76.6 per cent of respondents believed the code should be compulsory, with 23.3 per cent suggesting that it should remain voluntary.
However, the survey also revealed serious misgivings among respondents to the Government’s move to make insurance inside superannuation ‘opt-in’ for those aged under 25 and those with balances at or below $6,000.
It revealed just over 63 per cent of respondents were opposed to the Government’s move, albeit that many were concerned about the manner in which insurance premiums were eroding member balances.
Asked whether they believed something needed to be done about the way in which insurance premiums eroded superannuation member balances, 73 per cent of respondents argued for measures to eliminate the balance erosion.
The survey results appear to confirm a strong view that the industry should self-regulate with respect to minimising fee erosion rather than having the Government impose legislation.