In a minor win for superannuation funds and group life insurers, the Senate Economics Legislation Committee has recommended to the Government that it defer the implementation of the its second round of legislation impacting insurance inside superannuation for two months.
The committee is also backing a Productivity Commission call for an independent public inquiry into insurance inside superannuation to determine whether other policy changes are needed.
The major recommendation flowing from the Senate Committee’s review of the Treasury Laws Amendment (Putting Members’ Interests First) Bill was that the commencement date for the legislation be delayed until 1 December, this year. However, this is only three months longer than the original 1 October date which was widely regarded as inadequate.
The outcome will dismay many superannuation fund and insurance industry executives who were arguing for a longer delay because of continuing confusion around the implementation of the Government’s allied Protecting Your Super legislation.
In dissenting comments, Labor members of the Senate Committee expressed concerns about the implementation timetable, the committee’s failure to recommend the exclusion of superannuation fund members in high risk occupations and the impact on insurance premiums.
The Senate Committee report noted that the most frequently raised concern by inquiry participants and that the committee was being told that the 1 October date was unworkable or unachievable.
The Senate Committee also did not take account of industry submissions that workers aged under 25 and working in high risk occupations should be excluded from the legislation and gave no positive recognition to the impact the legislation would have on the premiums attaching to insurance inside superannuation.
On the question of workers in high risk occupations, the committee’s chairman, Liberal Senator, Slade Brockman said that the legislation did not bar superannuation fund members in high risk areas from opting in to insurance.
“Furthermore, the committee reiterates that there are other support mechanisms available to assist people affected by illness or injury and who are unable to work,” he said in the committee report.
