The future of insurance through super

As an industry fund, a large proportion of our members work in the energy industry. These members include everyone from apprentices and administrative staff, to linesmen, electricians and managers. Our members often work in challenging conditions and environments to restore and maintain power supply to millions of Australian households.

Default Cover protects lives and livelihoods

Currently, when a new member joins EISS Super we provide them with a package of insurance called Default Cover, which includes Death and Total and Permanent Disablement Cover (TPD). This cover helps members meet their living expenses and support their family if they suffer a serious illness or injury or pass away unexpectedly.

Insurance cover is especially important for our younger members who may be beginning careers in challenging and sometimes higher risk roles. Default insurance cover through super may also be the only form of cover they have to protect them and their families if something unfortunate happens outside of the WorkCover environment. It can mean the difference between financial security and financial stress during challenging periods of their lives.

Why insurance through super is important

By paying for cover directly from their super account, members can enjoy peace of mind with no out-of-pocket expenses. This can be particularly important for apprentices and other employees on lower wages or with family commitments. The premiums are usually cheaper too, due to the collective buying power of the fund securing group rates.

Planned changes to super

In the 2018/19 Federal Budget, the Government announced the Protecting Your Super Package which proposes three main changes to prevent people from having their super whittled away by unnecessary fees:

  1. The Government will be able to consolidate some super accounts.
  2. Fees and administrative charges will be capped.
  3. People under age 25 will now have to opt-in to insurance cover.
Our view of the changes

We agree with the Government that it is important to protect the super balances of young workers from being eroded by unnecessary fees – especially if they have multiple accounts.

Where we disagree is making insurance cover opt-in for young people. This introduces the risk that many of them will have no cover at all during a period of their lives where they are more likely to engage in high-risk behaviour.

We’re committed to helping all our members build the savings they need for the retirement they deserve. Protecting their income during their working lives is a big part of that commitment, which is why we will continue our efforts to persuade the Government to reconsider the proposed changes to default insurance.