The government’s review of Your Future Your Super measure will include stapling despite earlier indications it would not.
The Albanese government announced a post-implementation review on the YFYS changes and the only reference to stapling was that it wouldn’t “unwind” the measure.
“The review will not unwind ‘stapling’ measures, which reduce the proportion of duplicate accounts, or remove the requirement for trustees to meet high performance and probity standards,” financial services minister Stephen Jones stated when announcing the review on 7 July.
Speaking at the Investment Magazine Group Insurance Dialogue on Tuesday morning, Jones confirmed stapling will be part of the review.
“I want to be clear that we’re not going back to the days pre-stapling and the decade that proceeded that we had hundreds of thousands of duplicate accounts charging duplicate fees that many people didn’t know about. We’re not going back to that.”
Jones noted that throughout the debate of the YFYS legislation he frequently pointed out there would be unintended consequences for insurance.
“We pointed out this was going to have an unintended consequence in relation to insurance, inappropriate insurance, loss of insurance or inability to get appropriate insurance,” Jones said.
The review will assess if these “fears have been materialised” and if so, what solutions can be put in place to improve the system,
Finding purpose
Additionally, Jones said there has been internal consideration by government over whether the purpose of superannuation needs to be enshrined in legislation.
“There are pros and cons of that. We’ll land on a position on that in the near future.”
Jones said Labor has always been clear that super is about retirement income and ensuring all Australians have access to a dignified retirement.
“The purpose of superannuation has never been unclear from members of this government or members of this party. Ancillary benefits inside superannuation including insurance are obviously there for people who don’t reach retirement age or have some sort of unforeseen and horrific event in their working lives, but the objective of insurance is very clear from our side.”
TAL chief executive Brett Clark also spoke about the impact insurance has for protecting people who can’t maintain a working life.
“I don’t see insurance in any way as being controversial inside the superannuation system when you understand what the role of the superannuation system is: to provide a dignified retirement,” Clark said.
Why CALI and why now
Clark and AIA Australia chief executive Damien Mu are both representatives of the Council of Australian Life Insurers, the new peak body which has formed as a breakaway group by the life insurers that are part of the Financial Services Council.
Clark said the development of the life insurance industry from vertically integrated businesses within the banks and larger wealth managers to a specialist life insurance has meant the industry needs to find its own voice.
“The time is right for the life insurance industry to have a strong standalone voice and Damian and I are very joined on this issue as is the entire life insurance industry. The time is ripe for that strong around that singular voice around life insurance.”
