Superannuation funds have been warned to get their houses in order with respect to insurance within superannuation eroding members’ balances, particularly younger members.
The Minister for Revenue and Financial Services, Kelly O’Dwyer, said the erosion of member balances was an issue being frequently raised with her by constituents and by fellow Parliamentarians.
She said there were frequent complaints about balances being eroded by premiums that younger members did not even know they were paying for.
O’Dwywr said that for this reason she welcomed the formation of the insurance working group and hoped that it would work effectively to address the problem.
The minister also made clear why the Government had defined the objective of superannuation as being to provide income in retirement to supplement the Age Pension.
She said there was a risk that future governments would continue to tinker with the superannuation settings if the objective of superannuation was left too imprecise such as seeking to pursue adequacy and comfort.
Addressing the Association of Superannuation Funds of Australia (ASFA) conference on the Gold Coast, O’Dwyer sought to explain why the Governmebt had rejected ASFA’s call for a higher objective for superannuation particularly around retirement incomes being adequate to achieve a comfortable retirement — something which was reinforced by former ASFA chairman and TAL chief executive, Jim Minto, in an industry oration.
