Calls for anti-detriment extension
Russell Investment Group is calling for the Government to extend the anti-detriment provisions to include terminal illness payouts.
Under the current laws, anti-detriment provisions only apply to superannuation death benefits, allowing a super trustee to increase a death benefit by the amount required to refund all the 15 per cent contributions tax paid in respect of the member, before claiming a tax deduction so that there is no overall cost to the fund.
In Russell’s view, by not including terminal illness payouts in the scope of anti-detriment provisions, it is not always in the best interests of members or their dependants to pay out a terminal illness benefit.
“Regrettably, at present, superannuation members can find themselves in a position where they need to choose between early access to a lower benefit, or leaving a higher amount to their dependants after they’ve passed,” Russell director of actuarial and benefits consulting Matthew Burgess said.
Burgess believes the anti-detriment provision payment should be payable along with terminal illness benefits in exactly the same way that it applies to death benefits.
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