Retirement
The 2.7m workers exposed due to super reforms
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.
The 2.7m workers exposed due to super reforms
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.
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.
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.
RELATED ARTICLES
About the author
About the author
Superannuation
Superannuation guarantee rate rises to 12 per cent as parental leave changes take effect
The superannuation guarantee rate has increased from 11.5 per cent to 12 per cent from Tuesday, with super contributions also being added to Commonwealth Parental Leave Pay for the first time. Read more
Superannuation
Rest's Sustainable Growth option achieves highest sustainability classification
Rest superannuation fund has achieved the highest sustainability classification for its Sustainable Growth investment option from the Responsible Investment Association Australasia. Read more
Superannuation
Aware Super slashes admin fees for retirees by up to 25 per cent
Aware Super has reduced administration fees for members with a retirement income account by up to 25 per cent and lowered the maximum annual fee. Read more
Superannuation
SuperAPI co-founder criticises Labor's superannuation tax as 'sneaky tax on young people'
The co-founder of SuperAPI has labelled Labor's proposed tax on superannuation balances above $3 million as a "sneaky tax on young people, tomorrow" disguised as a policy targeting wealthy retirees ...Read more
Superannuation
Election policies could reshape Australia's superannuation landscape, expert warns
Competing superannuation policies from Australia's major political parties could have significant implications for investors and retirees, according to a financial expert. Read more
Superannuation
Industry leaders weigh in on concessional super tax as Budget confirms $55bn investment
Changes to the taxation of superannuation earnings and contributions have drawn mixed responses from financial and payroll sector leaders, as the Federal Budget confirms over $55 billion in ...Read more
Superannuation
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly ...Read more
Superannuation
Rest members back calls for fairer superannuation rules ahead of Federal Budget
Rest has called on the Federal Government to implement superannuation reforms aimed at improving fairness across the system, after member survey results showed strong support for a range of proposed ...Read more
Superannuation
Superannuation guarantee rate rises to 12 per cent as parental leave changes take effect
The superannuation guarantee rate has increased from 11.5 per cent to 12 per cent from Tuesday, with super contributions also being added to Commonwealth Parental Leave Pay for the first time. Read more
Superannuation
Rest's Sustainable Growth option achieves highest sustainability classification
Rest superannuation fund has achieved the highest sustainability classification for its Sustainable Growth investment option from the Responsible Investment Association Australasia. Read more
Superannuation
Aware Super slashes admin fees for retirees by up to 25 per cent
Aware Super has reduced administration fees for members with a retirement income account by up to 25 per cent and lowered the maximum annual fee. Read more
Superannuation
SuperAPI co-founder criticises Labor's superannuation tax as 'sneaky tax on young people'
The co-founder of SuperAPI has labelled Labor's proposed tax on superannuation balances above $3 million as a "sneaky tax on young people, tomorrow" disguised as a policy targeting wealthy retirees ...Read more
Superannuation
Election policies could reshape Australia's superannuation landscape, expert warns
Competing superannuation policies from Australia's major political parties could have significant implications for investors and retirees, according to a financial expert. Read more
Superannuation
Industry leaders weigh in on concessional super tax as Budget confirms $55bn investment
Changes to the taxation of superannuation earnings and contributions have drawn mixed responses from financial and payroll sector leaders, as the Federal Budget confirms over $55 billion in ...Read more
Superannuation
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly ...Read more
Superannuation
Rest members back calls for fairer superannuation rules ahead of Federal Budget
Rest has called on the Federal Government to implement superannuation reforms aimed at improving fairness across the system, after member survey results showed strong support for a range of proposed ...Read more
