A $1.5 billion superannuation fund will increase life insurance premiums as a result of the Protecting Your Super Package reforms.
New and existing REI Super members will pay more for death and TPD cover from 1 July 2019. They join the ranks of AustralianSuper members, who will pay more for life insurance from 1 June 2019.
Members aged between 15 and 64 years old assessed under standard rates will be hit with the following fee schedule: death and TPD will rise from $1.42 to $1.66 per week; while death-only cover will go from 71 cents to 86 cents per week.
For members assessed on non-standard rates, the new prices apply: death and TPD cover will increase from $2.77 to $3.23 per week; while death-only cover will move from $1.38 to $1.67 per week.
|Sponsored by SSGA SPDR|
2019 and Beyond: Managed Accounts Current and Future Trends
Members that have fixed death and TPD cover will also see their premiums go up, but the cost of income protection cover will not change.
REI wrote to members that it was prompted to review its insurance arrangements with MetLife due to the new PYSP laws.
REI is introducing the changes "to help protect members who are not making regular contributions to their accumulation accounts or have account balances below $6000," it explained.
"As a result of the legislative change described above, we have also decided that from 1 July 2019, this '12 month' cessation of cover rule will no longer apply.
"Instead, TPD cover (along with any other cover) held by a member will cease whenever there is a 16-month period of inactivity (based on the absence of any contributions or rollovers to an account, not just a failure to receive employer contributions).
"This means that from 1 July 2019, TPD cover (and any associated insurance fees) can continue for participating employer members even if we haven't received employer contributions for them for 12 months (until cover ceases for some other reason)," the letter read.
The super fund announced last year it was reducing select insurance premiums after renegotiating its group insurance mandate. It also slashed the administration fee on its pension account.