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Retirement

The 2.7m workers exposed due to super reforms

  • April 22 2021
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Retirement

The 2.7m workers exposed due to super reforms

By Cameron Micallef
April 22 2021

Industry super fund Cbus has urged the Senate to reject the government’s flagship superannuation reforms on the basis that stapling funds risks creating insurance shortfalls for 2.7 million workers.

workers exposed due to super reforms

The 2.7m workers exposed due to super reforms

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  • April 22 2021
  • Share

Industry super fund Cbus has urged the Senate to reject the government’s flagship superannuation reforms on the basis that stapling funds risks creating insurance shortfalls for 2.7 million workers.

workers exposed due to super reforms

The industry fund that represents construction workers warned that the Your Future, Your Super reforms will leave its members who are in hazardous occupations at risk, as they may miss out on a level of cover appropriate for their work.

Under the proposed reforms, members will avoid paying for duplicate fees due to being stapled to one fund throughout their working life.

However, Cbus pointed out that many younger members who joined the building and construction sector will likely retain earlier funds which do not provide cover under the dangerous occupation exception.

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The Putting Members’ Interest First Bill in recent years had switched up default insurance settings in super – cancelling insurance cover for members with balances below $6,000 when they didn’t elect to keep the cover and only starting insurance cover for members when they reached the $6,000 threshold and turned 25.

But the legislation had the dangerous occupation exception, a clause allowing workers in risky jobs to keep their automatic entitlement to insurance if they were under 25 years old.

Cbus said the exception has allowed 115,800 building and construction workers to obtain or retain insurance, with a total of 58 claims ($7.5 million) being paid out to them or their beneficiaries between 1 April 2020 to 31 March 2021.

Cbus CEO Justin Arter said it was concerning that many workers may find themselves without coverage under the proposed changes to legislations.

“If a construction worker is ‘stapled’ to a fund they joined at their first job, they could be paying for insurance that will not cover them, should they sustain a work-related injury,” Mr Arter said.

Younger workers are of greater concern, with many, Cbus claims, coming from employees in their first year on building sites, when they are new to the industry and at higher risk.

“This first year of operation of the Dangerous Occupation Exception underscores the importance of the amendment,” he said.

“Why would there be recognition for the importance of insurance for workers in dangerous occupations then, but not after a year in operation? The flow-through effects of the amendment illustrate how we must stay the course with providing industry-specific insurance for workers in hazardous jobs.”

He also urged the Senate economics legislation committee, which is examining the Your Future, Your Super Bill, to reject the legislation.

The 2.7m workers exposed due to super reforms
workers exposed due to super reforms
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About the author

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Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

author image
Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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