The Coalition’s plan to let Australians access their superannuation for a house deposit would create a “budget blackhole”, according to modelling commissioned by the Super Members Council.
The big technology companies are probably good companies, but the disconnect is in their valuations. For Pzena Investment Management, it’s 2000 all over again.
… as Tasplan tests the waters for other big funds
Tasplan, the $8 billion Tasmanian-based industry fund, has become one of the first to review its insurances ahead of the proposed “Protecting Your Super” legislation. There are winners and losers in this situation.
Nick Connor, the Tasplan chief operations officer, says that his fund’s review actually started because of the recent mergers, ahead of the Government announcement to do with making under 25s having to opt in to life insurance. He, and his colleagues at Tasplan, are not fans of the proposed changes.
Following the review, with advice from Mercer, Tasplan has appointed MetLife as its group insurer. The incumbent was CommInsure (soon to be owned by AIA).
Connor says that there were five contenders for the contract and there was “no wrong answer” for any of the questions the fund and adviser asked of them. “Whilst all tenderers demonstrated capacity at the end of the day, price is always important,” he says, “but also very important is cultural alignment and a well-structured digital offering.”
Tasplan is Tasmania’s largest not-for profit super fund. Under the Government changes, currently scheduled for July 1 next year, perhaps one-third of Tasplan’s members will no longer have life insurance cover unless they opt-in to the new system. Connor says he has heard anecdotal evidence of other funds with a lot of young members perhaps losing 50 per cent of those members’ coverage.
The interesting thing about Tasplan is that, with its tender, it set out to restructure its offering to ensure that the insurance cover matches the lifestyle needs of its members. The fund merged two policies under the one new design also incorporating all aspects of the Insurance in Superannuation Voluntary Code requirements.
An observation from Connor is that for Tasplan members the under 25s do not have a particularly different insurance claim profile than the older members. “From our claims experience, it is untrue that that the under 25s are so different… We are probably the first big fund to lock in a new-design price. When you are comparing apples with apples, the new contract provides better value to our members and ensures younger members are not subsidising our older ones.”
The “Protecting Your Super” legislation also includes sending off to the ATO administration those members with less than $6,000 in their individual balances who have not been active over a certain period. This is likely to lead to an extra shrinkage in super fund memberships and engagement with Australian workers.
One wonders whether the Government is intentionally trying to reduce the attractiveness of industry and other not-for-profit funds compared with bank-owned retail funds and SMSFs.
– G.B
