POWERED BY MOMENTUM MEDIA
Keep insurance for low super accounts urges consumer groups
The Consumer Action Law Centre and Financial Rights Legal Centre have reacted to the Treasury Law Amendment (Putting Members’ Interests First) Bill 2019 by stating those who are financially vulnerable should still be able to access insurance in their superannuation.
The groups said they supported the objective of preventing unnecessary insurance premiums from eroding people’s super account balances, but were worried about those with low income or low super balances.
It said it did not support the removal of default insurance on active superannuation accounts with balances under $6,000.
In a submission to the Senate Economics Legislation Committee, the two groups said: “While we acknowledge the significant impact of balance erosion on low-balance accounts, it does not follow that people do not need insurance simply because they have less than $6,000 in superannuation.
“A successful insurance claim can have a life-changing effect for families struck by injury, illness or death. The beneficial impact of topping up retirement income when a person’s working life is unexpectedly cut short is arguably much greater for a person with a low superannuation balance than to someone with a substantial balance.”
The changes would particularly affect those who had recently returned to work after a period of absence, those who were new to Australia and those with an employer who had not paid employer contributions, they said.
Two alternative recommendations were put forward by the groups; to keep default insurance in low-balance superannuation accounts or that low-balance account reforms were delayed until the impact of the Protecting Your Super Act reforms on account erosion was known.
AUTHOR
Laura Dew
Laura Dew is editor at Super Review. Prior to joining SR, she spent five years working at Investment Week in the UK covering asset and wealth management.
Recommended for you
Super funds had a “tremendous month” in November, according to new data.
Australia faces a decade of deficits, with the sum of deficits over the next four years expected to overshoot forecasts by $21.8 billion.
APRA has raised an alarm about gaps in how superannuation trustees are managing the risks associated with unlisted assets, after releasing the findings of its latest review.
Compared to how funds were allocated to March this year, industry super funds have slightly decreased their allocation to infrastructure in the six months to September – dropping from 11 per cent to 10.6 per cent, according to the latest APRA data.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.73 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
30.15 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.71 3 y p.a(%)
