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.
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