In a report released last week, the regulator said it had concerns around “poor disclosure where [super fund] members’ insurance cover has changed or ceased”, adding that it expected funds to be more “consumer-focused” in this regard.
“It is not enough for trustees to mention circumstances in which cover might change upfront, as disengaged members will almost certainly not recall that possibility many years later,” the report said.
In addition to this lack of disclosure on the part of some funds, ASIC found that some super fund members where placed in inappropriate defaults.
“In some cases, where trustees have moved members within a fund, trustees are treating members as ‘smokers’ for the purposes of calculating their insurance premiums without knowing whether the member smokes or not,” ASIC said.
“This can result in a higher premium for the member, which would be inappropriate given the low and decreasing levels of smoking among members of the public.”
Peter Kell, the regulator’s deputy chair, said ASIC was “taking follow-up actions” with super funds to rectify these issues.
“We intend to make public the results of our 2017 project work. Now is the time for trustees to consider whether their practices are in the best interests of members, as well as whether their members are adequately informed of decisions affecting them,” Mr Kell said.
The report did not list the funds ASIC had concerns about.