While the lack of reference to insurance in the Government’s consultation paper on the objective of superannuation may not be part of the ‘main game’ in the proposed super reforms, it nonetheless engaged with many Riskinfo readers this week – evidenced also by the response we received to our poll question…
The Council of Australian Life Insurers has welcomed the release of the Government’s ‘legislating the objective of superannuation’ consultation paper, but says it believes Australia’s economy and member outcomes are best served when superannuation is underpinned by life insurance.
The Government says it is taking the next step towards legislating an objective for superannuation and that the consultation paper seeks feedback about the benefits, phrasing and implementation of an objective for superannuation.
A statement from Treasurer Jim Chalmers and Minister for Financial Services, Stephen Jones, says the Government wants “… to protect super because we know that by doing this, we’re safeguarding retirement savings and improving the living standards of Australians.”
The consultation paper, which does not mention the word ‘insurance’, sets out the Government’s proposed definition of the objective: “…to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way.”
CALI Chief Executive Officer Christine Cupitt says in a statement that that insurance in superannuation “…is critical to ensuring Australia’s superannuation system is equitable and sustainable.”
Cupitt says many Australians will become injured or seriously ill and will not be able to participate fully in an active working life.
…Having insurance in superannuation means that Australians have a safety net…
“Having insurance in superannuation means that Australians have a safety net when faced with major illness or disability.”
She says insurance in superannuation “…can step in to meet their financial need first, which helps to protect superannuation balances and enable a dignified and financially secure retirement.”
Cupitt says the life insurance industry will contribute to the united effort to create a more sustainable superannuation system and will participate in the consultation.
Advisers and other stakeholders can click here to read the Government’s ‘Legislating the objectives of superannuation’ Consultation paper.
