Cbus has called on the federal government to require stronger warnings during employee onboarding, arguing workers in high-risk jobs can be left without critical insurance cover if they are stapled to an unsuitable super fund.
In its submission on the draft regulations for the government’s proposed ban on advertising superannuation funds during onboarding, the fund said reforms should go beyond limiting product marketing and explicitly warn workers when their stapled fund may not provide appropriate insurance for their occupation or circumstances.
The fund said the issue was especially acute for younger workers and those in hazardous industries, where default insurance inside super can be a primary financial safety net in the event of death, disability or serious illness.
“Choosing a super fund tailored to your industry can be the difference between being adequately insured or not insured at all,” Cbus chief member officer Tom Garcia said. “For many workers, especially in high-risk jobs, insurance within super is a key source of financial protection in the event of death, disability or serious illness.
“This coverage is highly sensitive to fund choice, and decisions influenced by marketing or a lack of information during onboarding can have dire financial consequences for workers and their families.”
Cbus said workers under 30 accounted for almost one in three claims paid under its Dangerous Occupation Exception, which provides automatic insurance cover to young workers in hazardous occupations regardless of age or account balance.
Between April 2020 and 31 December 2025, the fund said it paid $178.5 million to more than 1,415 members or their beneficiaries through the Dangerous Occupation Exception. Its submission said almost one in three of those claims involved members aged under 30.
Workers starting jobs in construction, energy and other high-risk sectors are unlikely to be able to secure equivalent cover outside superannuation and often rely on default insurance inside super for protection, Cbus said.
The fund added it was among the few super funds to adopt the Dangerous Occupation Exception, which it said was designed to ensure younger and less experienced workers in hazardous jobs are not left uninsured from their first day at work.
“Had these members been with almost any other fund they would have received nothing,” Garcia said.
“And we know this disproportionately impacts younger workers – almost one in three of these claims are for members under the age of 30.”
The warning formed part of Cbus’s response to Treasury’s draft regulations for the super advertising ban, which are intended to curb marketing or sales tactics during onboarding that may steer workers into underperforming or inappropriate products.
The fund backed tighter limits on which super products can be shown during onboarding and supported rules governing the labelling, prominence and disclosure of permitted MySuper products.
In its submission, Cbus also argued any advertised fund should not be given prominence over a default fund and called for a standardised onboarding interface backed by minimum design standards and regulatory guidance.
Cbus said it remained concerned the combination of stapling and limited disclosure could leave some workers underinsured or uninsured if they stayed in, or moved to, a fund that did not match their occupation or insurance needs.
To address that risk, the fund proposed mandatory onboarding warnings, including a clear disclosure where a stapled fund may not provide appropriate insurance, a prominent warning that workers under 25 or with low balances may not automatically receive cover unless they are in hazardous work and their fund has a Dangerous Occupation Exception, and a requirement to highlight key insurance differences such as hazardous occupation exclusions or inclusions.
“We support individuals’ right to choose the super fund that best suits them, but there should be protections in place to highlight key differences, particularly insurance,” Garcia said.
“As a minimum, new employees need to be made explicitly aware of these risks so they can make an informed decision.”
