It has been just over a year since The Superannuation Voluntary Code of Practice (ICoP) launched on 1 July 2018 which means that funds who have opted in have only 2 more years to fully transition – June 2021 may seem far off however there is still a lot of work to be done!
By now, funds should have:
- Confirmed their intent to adopt ICoP and
- published their transition plans online informing members of expected timeframes.
These were the easier bits.
Since ICoP was introduced the industry has been hit with the Protecting Your Superannuation Package Legislation (PYS). With a more immediate implementation date of 1 July 2019, and with both initiatives addressing the removal of insurance cover due to account inactivity, compliance with the PYS legislation moved to the top of the list for funds.
From an administrator’s perspective, they too have inadvertently been caught out by the PYS requirements and their ICoP schedule has slipped. Most are now talking to funds about August 2019 where members will be able to cancel their insurance over the phone. The clock is ticking.
Now that we have moved beyond 1 July 2019, funds should be ready to return their focus to ICoP and reviewing insurance benefits designed to be ‘Appropriate and Affordable’ for Automatic Insurance Members (AIMs). Basically, making sure premiums are affordable and do not exceed 1% of estimated member salaries.
Fortunately, there is no longer a requirement to remove a member’s insurance cover based on their AIM or non-AIM status (with some notable exceptions). Funds do need to consider, however, which members to identify as ‘vulnerable’ and what assistance will be offered to those members as per ICoP requirements.
A significant section of ICoP addresses insurance claims, enquiries and complaints and the recommended timeframes for communicating with members during each stage. Trustees need to commit to review claim decisions in 5 business days which may prove difficult for some and prompt a review of existing business processes.
Of course, at the heart of ICoP is communications, and the requirement that interactions with members be clear and upfront. Funds will need to review all their member communications to ensure that information being issued to members meet these criteria. This can include welcome packs, annual statements and even social media posts!
The good news – funds still have another 2 years to fully transition. The bad news – with the frequency of changes in the industry, no doubt additional requirements will pop up along the way, such as the ‘Putting Members Interests First’ Bill proposed to commence later this year, which may or may not push ICoP back down the priority list. The time will pass very quickly whatever happens, so best strategy is to push forward. And of course, be in touch if IQ Group can help.