20 February 2019
Media Release - #2019022, 2019

Protecting members from unnecessary insurance in superannuation

Joint media release with
The Hon Josh Frydenberg MP
Treasurer

The Coalition Government will introduce legislation into the Parliament today to protect Australians from paying premiums for insurance they don’t want, need or even know they have.

The Treasury Laws Amendment (Putting Members' Interests First) Bill 2019 will require insurance in superannuation for under 25 year olds and members with low balance accounts to only be offered on an opt-in basis from 1 October 2019.

It means the hard-earned retirement savings of millions of Australians will be protected from undue erosion through inappropriate insurance arrangements.

Based on the most recent data, this Bill, together with superannuation reforms passed by the Parliament earlier this week, will see five million Australians have the opportunity to save around $3 billion in insurance premiums.

Recent data also indicates, of the around 1l million Australians with insurance in superannuation, around 2.5 million individuals have duplicate cover. Of these individuals, over 10 per cent are under 25 years old.

Importantly, the Government’s reform will not prevent anyone who wants insurance in superannuation from being able to obtain it – members will still be able to opt in.

The Government is putting the interests of members, not insurers or funds, first.

The Government has already successfully passed legislation through Parliament which will see superannuation members reunited with low balance and inactive accounts. By doing so, three million Australians are a step closer to being reunited with around $6 billion worth of superannuation.

These laws passed will also see exit fees banned and excessive fees on certain accounts capped, saving 7.2 million Australians hundreds of millions of dollars in the first year.

The legislation passed despite Labor’s attempts to put the interests of superannuation funds ahead of superannuation members.

With 15 million Australian superannuation members and over $2.7 trillion worth of superannuation savings, making our superannuation system work for members is part of the Government’s plan for a stronger economy.