Centre Alliance Senator Rex Patrick is today calling on Senator Storer to stand up to the intense lobbying by the banks, super funds and insurance companies and pass the Government’s ‘Protecting Your Super Package’ Bill, which is listed for debate in the Senate on Monday.
The Bill is designed to guard against the unnecessary erosion of superannuation balances through excessive fees and inappropriate insurance arrangements. The Productivity Commission made a number of draft findings in relation to workers unknowingly having multiple accounts caused by default ‘opt out’ insurance arrangements.
The Productivity Commission found that unintended multiple accounts and low balance accounts cost members around $2.6 billion a year. This is made up of $1.9 billion in excess insurance premiums and $690 million in excess administration fees. That’s around $7 million a day being siphoned from workers’ accounts to banks, super funds and insurance companies – for no reason at all.
“It’s hard to see how this is much different from banks charging dead people or fees for no service, as exposed by the Banking Royal Commission,” said Rex.
“How this Bill has not passed the Senate astounds me. He’s either on the side of the workers, or he’s on the side of the banks, super funds and insurance companies.
“The reaction we’ve seen from those lobbying for amendments would make you believe the Government is trying to ban insurance for people under the age of 25. This is not the case. Under the proposed amendments every under 25-year-old who wants insurance can get it. The difference is the member will make the choice based on what works for them.”
The changes to default insurance arrangements reflect what was recommended by the Productivity Commission, and are backed by the consumer group CHOICE.
“It comes as no surprise that the biggest objectors to the insurance changes are the ones that benefit it from the most. There’s much more value in these insurance arrangements for superannuation funds and insurance companies then there are for the workers,” said Rex.
“It’s hard to look past the hundreds of millions of dollars that the funds and insurance companies are ripping off from workers’ retirement savings, but it’s worse to send a message to these workers that you think it’s ok to let it continue – and that’s exactly what Senator Storer and other crossbenchers are doing.”