The majority of members of TWUSuper are unlikely to be caught up in the Federal Government’s new changes to insurance in superannuation because they are working in what are deemed to be a dangerous occupations.
That is one of the bottom lines of a submission filed with the Senate Economics Legislation Committee this month, with The TWUSuper submission suggesting that the majority of its members would not be impacted by the Government’s changes scheduled to come into force on 1 April because they would be covered by the dangerous occupation exemption.
“TWUSuper has consulted with its actuary to determine the feasibility and likelihood of the application of the exemption in relation to its membership. An analysis of the occupations of TWUSuper members indicates that the vast majority (95%) are in manual occupations,” it said.
“Occupation data collected from the fund’s largest employers provides evidence that the majority of the manual occupations are likely to be in dangerous occupations and covered by the dangerous occupation exemption.
“This means that the majority of members may continue to be covered by default insurance on an opt out basis and TWUSUPER will be unique in its ability to continue to provide the financial protection to its members and their families in the event of a death or serious illness or injury that prevents the member returning to work.”
TWUSuper also pointed to significant flaws in the Australian Prudential Regulation Authority (APREA’s) approach to heatmaps, using its submission to claim the heatmaps involved some significant classification errors which led to the fund comparing unfavourably with other funds.
The industry fund said that it was supportive of efforts to improve transparency in the superannuation sector and welcomed APRA’s decision to publish comparative data, but added “we are concerned the heatmap published by APRA misrepresents TWUSuper’s investment performance”.
“APRA’s initial heatmaps classified TWUSuper’s infrastructure and property assets as 100% listed when in fact they are almost entirely unlisted,” it said. “TWUSuper’s investments in unlisted infrastructure and property were classified as 100% growth when compared to some funds whose infrastructure and property assets were classified 75% growth and 25% defensive.”
The superannuation fund claimed this, and other classification errors had skewed TWUSuper’s investment risk rating, giving it a growth rating of 78%, when in fact it should be 71% growth.