Insurance Requirements for Employer Nominated Superannuation Funds

Last updated June 2011

Employers will need to check that their employer-nominated super fund is a complying fund and meets the insurance requirements for choice of super fund.

From 1 July 2008, employer-nominated super funds (also known as default funds) must offer minimum levels of life insurance death cover to members. An employer-nominated super fund is the fund that an employer chooses to pay an employee’s superannuation guarantee contributions to if they do not choose a fund.

INSURANCE REQUIREMENTS

Employer-nominated super funds must offer minimum life insurance for members:

• at a premium of at least $0.50 per week for those under 56 years
• with at least the level of insurance cover shown in the following table, or
• at a level of cover equivalent to the following table if the contributions are made to a defined benefit fund on behalf of a defined benefit member.

Age Range	Minimum level of life insurance cover
0 to 19	Nil
20 to 34	$50,000
35 to 39	$35,000
40 to 44	$20,000
45 to 49	$14,000
50 to 55	$7,000
56 +	Nil

There are some instances where employer-nominated superannuation funds do not need to meet the life insurance requirements, for example if employers:

• are making contributions under a federal award or into a retirement savings account
• arrange insurance either with another super fund or with an insurance provider and it meets the requirements, or
• are unable to obtain insurance from the fund in respect of a particular employee due to the employee’s health, occupation (for example, a high-risk occupation) or hours worked (for example, some casuals).

Employers can still contribute to a fund for an employee if the super fund they choose will not provide life insurance because of an employee’s:

• occupation
• health, or
• working hours.