Connect with us

Hi, what are you looking for?

Loan And Finance

‘Stapling’ reform takes effect but concerns over fallout remain – Life Insurance – Insurance News

inca social logo


The Federal Government’s “stapling” reform, aimed at preventing workers from holding multiple super accounts and paying unnecessary group insurance premiums, commences today.

The change means where an employee has an existing superannuation account, that account will be “stapled” and follows them when they change jobs, a statement from Treasurer Josh Frydenberg and Financial Services Minister Jane Hume said.

“These changes will end the creation of unintended multiple accounts every time individuals change jobs,” the statement said. “Every year around 850,000 duplicate accounts are created.

“Treasury has estimated that stopping the creation of millions of unintended multiple accounts over the next decade will boost balances in super by about $2.8 billion by avoiding duplicate fees and lost returns.”

The stapling measure is a recommendation from the Hayne royal commission’s final report in 2019 to the Government.

But consumer advocates and other stakeholders have voiced concerns the change may lead to some workers, especially those in physically demanding and hazardous occupations, losing out on critical coverage because of occupational exclusions in default insurance products.

The concerns have led Ms Hume to announce in June that Treasury will carry out a review of occupational exclusions. The Financial Services Council also announced last month it aims to introduce an enforceable standard banning occupational exclusions in default group life insurance in superannuation by January 2023.

Advertisement. Scroll to continue reading.

Super Consumers Australia says while it welcomes the “stapling” reform, it believes there should be a ban on occupational exclusions found in default life policies.

“The greatest benefit of default insurance is its ability to share risk among a large group of people, so that everyone has access to affordable cover,” Director Xavier O’Halloran said. “A very small number of funds have undermined the value of their cover by carving out certain occupations.

“This creates gaps and weakens the safety net. It’s not in keeping with the needs of people in a modern workforce, who change jobs and industries throughout their careers, but still expect to have a base level of protection.”

.



Source link

Click to comment

Leave a Reply

Latest

Online Business Success

By Anna Anisin, founder at DataScience.Salon, overseeing community and business development. getty Since the first quarter of 2020, there has been a major shift...

Loan And Finance

“We’re thrilled to be able to engage these three very talented students in the work we do as a growing global insurance start-up,” said...

Online Business Success

As thought leaders search for a failsafe cybersecurity standard, they’ve realized that a hard shift away from software and toward a hardware solution is...

Technology

Interested in learning what’s next for the gaming industry? Join gaming executives to discuss emerging parts of the industry this October at GamesBeat Summit...

Top Stories

Kieran Warwick created the play-to-earn game Illuvium with his brothers Aaron and Grant — all siblings of DeFi maverick Kain, the founder of Synthetix....

Online Business Success

Peter Done is Group Managing Director and founder of business services specialist Peninsula Group. Getty The difference between a manager and a leader is...

Advertisement

You May Also Like

Uncategorized

Introductions get a lot of attention. I’ve explored the topic of how to write them even though as a reader, I always skip them....

Online Business Success

The internet is now our nervous system. We are constantly streaming and buying and watching and liking, our brains locked into the global information...

SEO Guide

There are all kinds of pictures of the world on the internet, but to find one of these specific pictures that you want to...

Online Business Success

You can think of link building in many ways. I like to call it tedious, painful, and a test of patience. It’s also necessary...

Advertisement