$560m in claims paid to low balance super accounts
The validity of the Government’s legislative moves to remove insurance from low-balance superannuation accounts has taken another hit, with confirmation that around $560 million worth of life and disability claims were paid to people with superannuation account balances with less than $6,000.
Major life insurer TAL has used a submission to the Senate Economics Legislation Committee inquiry into the Government’s legislation to state it had estimated that for the financial year ended 30 June 2017, $560 million was paid to members in life and disability claims with superannuation account balances less than $6,000.
The TAL submission argued that, on this basis, the removal of automatic life insurance cover for superannuation members with account balances below $6,000 should only apply to inactive member accounts.
“There should also be no minimum superannuation account balance requirement for active members to be automatically provided life insurance cover,” it said.
Like many other submissions to the Senate Committee, TAL argued that a combination of Australian Taxation Office account consolidation and opt-in measures for those aged under 25 would collectively address the policy issue of ensuring insurance did not inappropriately erode retirement incomes.
The big insurer also pointed to the fact that consumer-focused groups had supported a different approach and that the Productivity Commission had also not supported the approach being pursued by the Government.
Recommended for you
Treasurer Jim Chalmers has handed down his third budget, outlining the government’s macroeconomic forecasts and changes to superannuation.
Online investment adviser and fund manager Stockspot has introduced Stockspot Super, Australia’s first 'ETF only' superannuation product. superannuation product.
ASIC has called on superannuation funds to improve their oversight of advice fee deductions following an investigation of 10 trustees that found $990 million was charged in one year.
With just 30 per cent of Australians knowing their superannuation balance to the nearest $1,000, Findex has emphasised the role of financial advice in addressing the critical super knowledge gap.
