The country's biggest superannuation fund, AustralianSuper, and consumer groups have lashed a government plan to ban automatic life insurance for low-balance accounts, after the Productivity Commission excluded this in its landmark report into the $2.6 trillion super sector,

In a submission to a Senate economics committee, the $123 billion fund said it understood the "key motivation" for the measure, which was included in this year's federal budget, but argued there was a "better way" to combat account erosion from unneeded cover.