Minister for Revenue and Assistant Treasurer
26 November 2001 - 17 July 2004
7 July 2004
SUPER SAFETY NET EXPANDED
The Government will expand access to financial assistance for people whose superannuation is lost as a result of fraud or theft, Minister for Revenue and Assistant Treasurer, Senator Helen Coonan announced today.
This announcement follows the release of a review of the operation of Part 23 of the Superannuation Industry (Supervision) Act 1993 (the SIS Act) which allows people to apply for financial assistance when their superannuation fund suffers losses as a result of fraud or theft.
“It was clear from the work of the Review and the stakeholder consultations that eligibility for financial assistance under Part 23 needed to be expanded to ensure equitable treatment for those whose superannuation is stolen or defrauded,” Senator Coonan said.
Currently, the Minister has broad powers to provide grants of financial assistance to members of accumulation funds who fall prey to thieves and fraudsters.
Since the SIS Act was established, Senator Coonan has made 802 determinations, granting approximately $44million in financial assistance.
“The $44 million in compensation paid so far is just a small proportion of the $565.9 billion invested in superannuation and evidence that loss of super through theft or fraud is not a regular occurrence,” Senator Coonan said.
“However, for those people who have lost their life savings this money is vital. Changes as a result of the review include new arrangements to ensure defined benefit fund members are offered the same protection under Part 23 as members of accumulation funds.
“The Government will also amend the SIS Act so financial assistance may be granted to individual members of an eligible fund who transfer to another eligible fund or a self-managed superannuation fund after a loss is suffered.
“The Review endorsed the Government’s policy of capping compensation at 90 per cent of eligible losses and supported maintaining Ministerial discretion to ensure that in determining appropriate compensation individual circumstances can be taken into account on a case-by-case basis.
“It is important for the whole community that appropriate safeguards are in place for people who lose their superannuation savings through fraudulent conduct or theft.”
The Review involved consultation with key stakeholders and industry representatives. The Government intends to introduce legislation later this year to implement the recommendations of the review.
A summary of the outcomes of the Review can be found on the Department of Treasury website.