Superannuation fund trustees will have to ensure members meet new stringent requirements if they are to receive benefits from SIS-related lump sum and disability income products, DEXX&R reports.
In the latest DEXX&R Digest, the research company revealed that a number of changes to SIS-related products had been made to most individual total permanent disability (TPD) and disability income products, and group based TPD, salary continuance benefits in personal and employer super products.
DEXX&R reported that lump sum SIS changes made to inside super products varied from product to product, however, all now include wording that benefits would only be paid to the trustee if they met the SIS definition of temporary or permanent incapacity.
“For death products terminal illness benefits inside super now need to be certified by two doctors, [however] outside super this remains one doctor for most products,” DEXX&R said.
“For TPD products the 'own occupation’ definition has been removed although Own Occupation continues to be available in Australian Super for low risk professionals and managers.
“In addition the unable to earn 25 per cent of income tier of the Education Training or Experience (ETE) definition has been removed from ETE definitions inside super.”
DEXX&R said there had been a number of major SIS changes to disability income products inside super including the removal of agreed value monthly benefits from some products, and the inclusion of an explicit statement that the insured must cease gainful employment for at least one day in some products that only require total or partial disablement during the waiting period.
Other disability income SIS changes included:
The research house has offered a silver lining after super fund returns saw the end of a five-month streak last month.
A survey of almost 6,000 fund members has identified weakening retirement confidence, particularly among those under 55 years of age, signalling an opportunity for super funds to better engage with members on their retirement journey.
The funds have confirmed the signing of a successor fund transfer deed, moving closer to creating a new $29 billion entity.
A number of measures, including super on Paid Parental Leave, funding to recover unpaid super, and frameworks to encourage investment in the energy transition, have been welcomed by the superannuation industry.
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