Have spent the last 3 weeks having a massive run in with my employers default superannuation fund. Long story short, I started a new job nearly 3 months back. The admin lady at head office never received my 'standard choice form' in which I selected my SMSF, as it appears my store manager never sent it to her. The first I heard about the default fund is when my employer sent them $149.99 for two weeks worth of super from my first months paycheck. they sent me a 'welcome pack' with PDS on the 8/4/13 some 7 weeks & 5 days after I starting working for my employer. This alone is a breach of corporate law on behalf of BT as financial institutions must provide a PDS to clients with in the 5 day cooling off period of commencing a financial service. At that stage I immediately contacted BT to ask what is going on with an account being set up in my name without my consent and requested that they don't touch my money as I intend to roll it over into my SMSF ASAP. BT assures me during this conversation that this $149.99 is secured in a special account that will not attract fees or charges, but will probably have the concessional 15% tax withdrawn. The next day at work I get my employer sorted out with where they must send my future super money. Then on a second night I call BT again to ask for them to email me the roll over forms which they do as well as telling me that they are affiliated with the Westpac bank, so I can drop into one of Westpac's branches to both get my ID verified and the roll over forms faxed through. The very next day is the 11/4/13, I do as instructed while also getting a 'communication report' from a helpful Westpac teller confirming the faxed ID & rollover form was received A-OK. I move on with life. Then on the 19/4/13 I get in the mail my exit statement from BT and to my shock they had withdrawn $81.46 from the $149.99 for 58 days of a Death & Total & Permanent Disability Insurance policy covering me for $3 million. On the exit statement it lists the insurance being charged on the 11/4/13, the same day they received the roll over request and processed the rollover. This is despite on 2 separate phone calls BT assured me that such a small amount the money would not attract fees or charges. So after tax of $10.28 was deducted I only got $58.25 out of an original deposit of $149.99. I immediately got back on the phone to BT and asked what was going on. BT explained that all default superfunds will have death & TDP cover added as compulsory as per the new super laws, unless each customer contacts their superfund to 'opt out'. I have since spoken to the Superannuation Complaints Tribunal, who weren't much help, but sent me to the Australian Prudential Regulation Authority who over see insurance on superannuation. I have had them confirmed today that industry wide as of the 1st of July 2013 each and every default superannuation fund must offer and implement by default a death & TDP coverage on each and ever member until such time those members opt out.
The super complaints tribunal have fucked up referring you to APRA and aren't focusing on the main issue here. The main problem here is that an account was set up under your name with out your consent!. I go back to the start and argue this point and throw it back to the admin lady some how passively worded to the effect that the company has fucked up, broken corporate law etc...
Thanks Aleks. I realize this, however I rely on my employer for future paychecks, I rely on BT for nothing. I am still in my 6 month probation period as this is a new job. Also it turns out an employer can set up an account for you in the absence of an employee chosen account being nominated. http://www.ato.gov.au/businesses/PrintFriendly.aspx?ms=businesses&doc=/content/00108082.htm. And retail superfunds chosen by default will be required by law to provide Death & TDP insurance unless members opt out. You are quite correct in this instance that ultimately the original fault here is my manager for not faxing the admin lady my completed standard choice form. But it has snowballed from there into something larger than it need be all because BT couldn't be bothered sending my the start up pack & PDS as soon as the fund was established, thus preventing me from correcting the error before money was involved. Also this prevented me from exercising my rights under the cooling off period provisions of the corporations act. Ultimately the wording of the legislation at this point in time puts the responsibility on the employee, who can in my example be inaccessible to the facts that other entities are operating on there behalf although not always in their best interest. I'm not trying to shirk my responsibility, in fact I've been forthright in providing the necessary information in all aspects of correcting this situation.
The problem with these things is you end up spending many hours trying to explain your situation. I don't do that any more, I call the company and ask for their address for service of legal documents, that alone is normally enough to speak with a manager. If I don't get anywhere I complete a statement of claim for small claims court and send it via registered post (signature return). I remember arguing with an insurance company a few years ago. There was a period of about 3 months where I hadn't paid, when I did pay they said "oh you were actually covered for that period" and they charged me the full amount. As soon as I asked for them to put it in writing that I was covered they offered to send out a cheque.
In this case it was an innocent omission; but I know of two cases where 'contract-out' payroll administration services were receiving 'gratuities' from superannuation funds for 'losing' Standard Choice Forms and sending SG contributions their way. You'd be surprised how many workers just gave up because they 'don't want to cause a fuss at work'.
The elephant in the room is that it is not yet 1/7/13 so there should not be a default insurance account on that super for the next 2 months.
This also happened to a family member where they submitted the super choices form with SMSF details and they opened a new fund.... This really shits me and has happened to me to. I submitted my super choice forms with my SMSF details and next thing I know I get a letter from one of the Big banks saying thanks for opening a super account with us But my situation was abit different the bank was used as a middle man to transfer funds into my SMSF. not as bad but still, NOT HAPPY JAN! They are essentially giving out your personal information without your consent? Mean while the bank probably sits on the money for a few days before they transfer it to your account Employer > Middle man Bank > My SMSF account
They charged me for insurance without my permission too, but made it so difficult to refund that I gave up trying to get it back. They are parasites.
Spoke to a friend today, they have had TPD insurance levied on their super account from a previous employer, there are no SGC contributions for the current year, hence no income should be recognised to protect and insure. They had $1500 taken from them, and when they complained they have no income to protect, the fund returned $50. A complaint is being generated. Worse, they are not in the default plan for the fund, and the fund tried to explain that they need to levy TPD insurance on all workers in the fund to comply with federal govt OHS requirements. Which is bogus, the fund is for government workers but the fund has a commercial trustee unrelated to the government and cannot be a proxy for the government. And super funds and politicians wonder why so many people are jumping ship into running SMSFs and taking charge of their own affairs. So many rorts and scams under every stone that's turned over. * Edit * I may have misunderstood something here. Is the 'default' we are talking about 1) being the default plan within a super fund eg 'Balanced' as opposed to 'Growth' and 'Aggressive', or 2) the fund itself being the default option for where employers send their guarantee contributions if the employee makes no other choice. Because if it is option 2, this has huge ramifications for lost fees for a huge portion of the community who take no interest in superannuation and just sign up to a new fund every time they take a job. I'm coming to a comprehension of how huge an issue this is.
Ouch!!! I'm sure they are protected by the corporations act from having to pay for an unsolicited service. Tell them to call ASIC on 1300 300 630 to find out what part of the corporations act has been breached. http://www.comlaw.gov.au/Details/C2011C00947/Html/Volume_4 (They may need make a few phone calls to get to speak with a helpful person at ASIC. Some of the staff are of little help and won't go into particulars, but others will.) Exactly what I'm thinking AngloSaxon. As this is new legislation I have only been able to have this confirmed over the phone by APRA. So according to them it is definitely option 2. In terms of ramifications this amounts to a free kick to all the retail funds. I've only stumbled across this scam by my own misfortune as detailed in the original post of this thread. Maybe, yet again I'm the canary in the coal mine. But it sounds like those who read there incoming quarterly super statement are about to find out just how much labor & their retail funds 'care' about them and their futures. Imagine the huge amount of Australians who don't give their super a second thought. Now imagine between $40-$120 being garnished from each of these accounts on a MONTHLY basis. We are talking about some massive amounts of money, I'd say we are in the realm of TENS OF BILLIONS OF DOLLARS! In my case the $42 a month insurance premium represents a 17% fee for an unsolicited service. Can anybody say 'Bail In'!? If the opposition wanted a watershed moment in this election campaign, this issue is yet another gifted opportunity from labor to the liberal party to pick them up by the scruff of the neck and rub their shitty little noses in it. For me no resolution is yet in sight. I have already spent my last 2 days off researching my options. My wife tells me to let it go and move on. But I will follow this through to the full extent of my layman abilities, not because of $81.46, but because I can't stand for the principle of it.
I got spruiked into switching to BT by the a bank when I opened a new account there. I soon realised that BT are the insurance equivalent of those gold buying stalls at shopping centres.
