CHOICE's research into the superannuation sector has found 43% of Australians have more than one super account which could be costing consumers up to $1.96 billion a year in unnecessary fees .
"For many Australians dealing with their super falls into the too hard basket. It's confusing, complicated and if you are unfortunate enough to be paying the monthly fees on one of the 14 million duplicate accounts, it can be very costly," says CHOICE CEO Alan Kirkland.
"With our latest research showing consumers are wasting a small fortune paying for duplicate insurance policies, it's time we had protections backed by the regulator to stop the erosion of consumer retirement funds," Mr Kirkland says.
The latest CHOICE research comes as the consumer group appears before a Federal Parliamentary Inquiry into the Life Insurance Industry in Sydney today.
"The super industry has recognised there is a problem and is creating a code, but if it's to be effective we believe it needs to be enforced by ASIC," Mr Kirkland says.
"Consumers need protections they can rely on. It's not good enough that consumers have to hope their insurer has signed on to self-regulation or will be forced to do something when they breach a protection.
"CHOICE has been working productively with industry to improve insurance in superannuation through the development of a self-regulatory code, but to make this work it needs to be registered with ASIC.
"A registered code will begin to rebuild the consumer trust that has been lost in the entire industry after a string of life insurance scandals. We know there are honest players who have had their reputations tarnished, but the whole industry needs to lift its game.
"There is an existential risk to the life insurance sector if it doesn't start putting the consumer at the centre of its product design. We've seen too many people paying for duplicate insurance through their superannuation, being sold inappropriate products and having claims defeated for unfair fine-print exclusions," Mr Kirkland says.
CHOICE's submission to the Inquiry into the life insurance industry also found there could be significant improvements in how insurers communicate with their customers.
"Consumers should be given clearer information about the insurance they're buying to help them understand why or if they need it, how much it costs and what the benefits are when they sign up. Problems in default superannuation funds in particular need to be addressed, where many consumers have little idea that they even have cover," Mr Kirkland says.
For more information on CHOICE's inquiry into the Life Insurance industry go to: choice.com.au/policy
Tom Godfrey, CHOICE Head of Media: 0430 172 669
CHOICE's key recommendations:
Change default group life insurance, particularly for younger people, to better match member needs and stamp out uneccessary duplicate insurance.
- Introduce a key fact sheet to aid consumer comprehension and comparability of life insurance (insurance outside of superannuation)
- Provide key information summaries that include key terms and fees for default levels ofcoverage when consumers sign up and via product dashboards (insurance inside superannuation)
What to do if you have duplicate super accounts?
- Before you consolidate, think about what your life insurance needs are. CHOICE has a life insurance buying guide to help, and if you are still unsure consider seeing a financial advisor.
- Find a superannuation fund which is right for you. CHOICE has a superannuation buying guide to help.
- Use the ATO super consolidation tool in MyGov to locate and consolidate all of your duplicate accounts into the fund you decide.
 APRA data shows there are almost 29 million accounts (http://www.apra.gov.au/Super/Publications/Documents/2016ASBPDF201506.pdf ), of which 14 million are duplicate (https://www.ato.gov.au/About-ATO/Research-and-statistics/In- detail/Super-statistics/Super-accounts-data/Super-accounts-data-overview/). The final assumption is that each duplicate account is paying $140/year in insurance (2014 average).