16th Sep 2019, 1:08 PM – Representatives Treasury Laws Amendment (Putting Members' Interests First) Bill 2019 - Consideration in Detail - Young workers

The majority voted against amendments introduced by MP for Whitlam Stephen Jones (Labor), which means they failed.

What were the amendments about?

Senator Jones explained that:

While most young workers and workers with low-balance accounts would be able to access life insurance or income protection insurance other than through group insurance through superannuation, this is not the case for many workers in high-risk industries. Concerns about this group of workers were, indeed, raised by the Productivity Commission in the report which led to this bill, the Treasury Laws Amendment (Putting Members' Interests First) Bill 2019, coming before the House. Importantly, the Productivity Commission contemplated an exemption for these workers, recommending that exemptions to the under-25 opt-in restriction should only be granted if the trustee can demonstrate to APRA that opt-out disability or income protection insurance would be in the best interests of that specific cohort of young members. It's exactly that proposition that Labor's second group of amendments go to.

Amendments text

(1) Schedule 1, item 1, page 4 (line 13), at the end of subsection 68AAB(4), add:

; or (e) a member to whom the occupation or industry exception applies (see section 68AAF).

(2) Schedule 1, item 1, page 5 (line 29), at the end of subsection 68AAC(4), add:

; or (e) a member to whom the occupation or industry exception applies (see section 68AAF).

(3) Schedule 1, page 5 (after line 35), after item 3, insert:

3A After section 68AAE

Insert:

68AAF Occupation or industry exception

(1) The occupation or industry exception applies to a member of a regulated superannuation fund who holds a choice product or MySuper product in the fund if, at the time the member first holds the product, the member is working in an occupation or industry covered by an election referred to in subsection (2).

(2) For the purposes of subsection (1), the trustees of a regulated superannuation fund may elect an occupation or industry if the trustees are satisfied that the election of the occupation or industry is appropriate having regard to either or both of the following:

(a) evidence of risk and insurance claims in the industry or occupation;

(b) the availability of insurance for people working in that industry or occupation that, if taken out on behalf of members of the fund working in that industry or occupation, would represent exceptionally good value for those members.

(3) However, the trustees of a regulated superannuation fund must not elect an industry or occupation unless the trustees are satisfied that applying the occupation or industry exception to members of the fund working in that industry or occupation would not inappropriately erode those members' superannuation interests in the fund.

(4) The election must be made by giving APRA a written notice that:

(a) is in the approved form; and

(b) is signed by each trustee of the fund; and

(c) includes the outcomes of an actuarial investigation of the matters mentioned in subsections (2) and (3); and

(d) includes data about risks in that occupation or industry and past insurance claims for that occupation or industry.

(5) An election under subsection (2) is not a legislative instrument.