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.
Recommended for you
The month of April enjoyed four back-to-back weeks of growth in financial adviser numbers, with this past week seeing a net rise of five.
ASIC has permanently banned a former Perth adviser after he made “materially misleading” statements to induce investors.
The Financial Services and Credit Panel has made a written order to a relevant provider after it gave advice regarding non-concessional contributions.
With the election taking place on Saturday (3 May), Adviser Ratings examines how the two major parties could shape the advice industry in the future.
