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Voluntary Code of Conduct for Super

Friday 5 January 2018

Late last year, the Australian Institute of Superannuation Trustees (AIST), the Association of Superannuation Funds of Australia (ASFA), and the Financial Services Council (FSC) published the Insurance In Superannuation Voluntary Code of Conduct.

This came just months after the publication of the Life insurance Code of Practice was published by the FSC, requiring all those who wish to remain members of the association to comply with the Code.

Super funds came under criticism last year for not advising their members of the automatic life insurance.
At the 2017 FSC Leaders’ Summit, Kelly O’Dwyer, Assistant Treasurer and Minister of Revenue and Financial Services, said efforts will be made to make superannuation funds more accountable to their members.

When it came to superannuation insurance, she indicated funds would be required to publish more ‘granular and transparent’ information about how members’ funds are managed.

Particularly, the concerns centred around younger superannuation members who could end up paying for policies they will never use.

Later in 2017, Ian Silk, Australian Super CEO suggested superannuation funds needed to be more transparent, since investment in superannuation was not discretionary investment and so all customers are not necessarily informed.

One of the areas where the Government has challenged super funds is in the lack of clear opt-out options for life insurance in superannuation plans.

The Code
The Code will begin on 1 July of this year and super funds will be expected to publish their intention to follow the Code by 31 March.

Superfunds will be expected to publish their transition plans regarding fund compliance with the new voluntary Code of Conduct by 31 December 2018.

The voluntary Code of Conduct states:

We will comply with the Code as early as we can, and no later than 30 June 2021, to allow for our existing contractual arrangements to be adjusted.
Adherents to the superannuation code will also pledge to work with insurance companies who have pledged to work with adherents to the Life Insurance Code of Practice.