AustralianSuper is increasing the cost of insurance, blaming the Federal Government's recent Protecting Your Super legislation for the changes.
On 1 June 2019, the cost of TPD and income protection cover will rise for AustralianSuper members with default insurance.
"Every year we review our insurance offering, including the cost of it, what we offer, claims made and paid, and any legislative changes," AustralianSuper said in a statement to members.
"As part of this review, the cost of cover, which is taken from your super account, can increase or decrease.
"After looking into past claims paid and the Federal Government's recent Protecting Your Super legislation, this year we've had to increase the cost of insurance. As always, you'll still only pay for what it costs us to provide your cover," it wrote.
The change will vary for each member, depending on age, individual work rating and amount of cover desired. Members have been provided with a fact sheet that can be used to calculate new premium amounts.
The cost of income protection based on a standard work rating and a benefit payment period of up to five years or up to age 65 (30 or 60-day waiting period) isn't changing, the fund said.
Protecting Your Super legislation will take effect on 1 July 2019. Super funds will be forced to transfer inactive low-balance accounts to the ATO and cease charging insurance for inactive members.
An account dormant for 16 months, which has not received contributions for this period, and has balance less than $6000, will be transferred to the ATO.
Last financial year, AustralianSuper paid 8565 of claims worth $460 million.
As of 30 March 2019, AustralianSuper members paid 50% more in administration fees after Australia's largest super fund announced it will increase fees at the start of the year.