Cbus calls for mandatory insurance warnings

Cbus is urging the government to warn young workers starting out or changing jobs if their insurance safety net won't cover them when things go wrong.

The call is part of the fund's submission to the federal government's superannuation advertising ban draft regulations.

Cbus said it supports clear limitations on which superannuation products can be presented during onboarding, as well as the introduction of rules around the labelling, prominence and disclosure for permitted MySuper products.

However, to protect workers from being left underinsured, Cbus is proposing mandated warnings at onboarding for employees, including a clear, mandatory disclosure where a member's stapled fund may not provide appropriate insurance for their occupation or circumstances.

It also said there should be a prominent warning that insurance for people under 25 or with a low super balance will not be provided automatic cover unless they work in a hazardous job and their fund has a Dangerous Occupation Exception (DOE). It also thinks key insurance differences should be highlighted, including hazardous occupations exclusions or inclusions.

Cbus chief member officer Tom Garcia said the reforms are critically important to ensure workers don't get funnelled into underperforming or inappropriate superannuation products, especially when changing jobs.

"We support individuals' right to choose the super fund that best suits them, but there should be protections in place to highlight key differences, particularly insurance," he said.

"As a minimum, new employees need to be made explicitly aware of these risks so they can make an informed decision."

Cbus said workers under 30 years of age represent close to a third of claims paid by the fund under its DOE.

However, the fund added critical information about insurance cover often isn't provided when workers select a super fund upon starting a new job.

Garcia said choosing a fund without industry-specific cover could have immediate and lasting consequences for workers, particularly in high-risk industries.

"Choosing a super fund tailored to your industry can be the difference between being adequately insured or not insured at all," he said.

"For many workers, especially in high-risk jobs, insurance within super is a key source of financial protection in the event of death, disability or serious illness.

"This coverage is highly sensitive to fund choice, and decisions influenced by marketing or a lack of information during onboarding can have dire financial consequences for workers and their families."

Cbus added workers starting jobs in building and construction, energy and other high-risk occupations, are unlikely to be able to take out cover outside of superannuation and therefore rely on default insurance in super to provide vital protection.

Between April 2020 and 31 December 2025, Cbus said it paid a total of $178.5 million to over 1415 members or their loved ones due to the DOE.

"Had these members been with almost any other fund they would have received nothing," Garcia said.

"And we know this disproportionately impacts younger workers - almost one in three of these claims are for members under the age of 30."