Tuesday, 4 March 2014

What is your superannuation paying for - a Kafkaesque tale of bureaucratic madness.

Superannuation is not at the top of my sexy topics list, but lately I've been educating myself. Maybe the advertising is sinking in and I have been researching different funds so I can streamline and consolidate. One of the things at the top of my list has been to sort out the superannuation I receive when I work as a casual employee at various universities.

What I've discovered is a bureaucratic, wasteful process - a discovery made only after I uncovered the fact that I even had an account with Uni Super.

Every time I earn more than $450 in a month, the university is obliged to pay 9.5% contribution to "my" superannuation fund. The rest of the country can choose their fund (a great initiative to allow people to consolidate their retirement savings), but the university's enterprise agreement has made the choice for everyone and sets UniSuper as the default account for all employees. That might be a fair and reasonable response, even an efficient one, for the bulk of people working in universities and serve the union agenda of supporting industry superannuation funds, but for me, a very casual casual who reaches the superannuation threshold once or twice a year, it's unfair.

My only option to address this is to fill in a paper form, that has to go in the post, requesting closure of the account and a rollover of all money in the account to another fund of my choice. Next time the employer makes a contribution, a new account will be opened for me. I will then have to fill in the same paper form, put it in the post, and request the closure of the account and rollover to my other fund.

The other thing that happens is the premium for the "optional" insurance for "death and total permanent disablement" is automatically deducted from my account. To have the premium stopped, I have to fill in a different three page paper form and put it in the post. I failed my first attempt and the form has been returned to me with the parts I handled incorrectly highlighted for me to complete and put in the post. I had to phone to find out what I should say on the form. It's full of jargon and requires knowledge about one's arrangements that I do not have, because I didn't make the arrangements.

I recently got around to filling in the form to close the account and rollover to my preferred fund but today I discovered that I have an account again - and the insurance premium is being deducted. Here is the ludicrous sequence of events:

  • my account was closed on 26 February
  • an employer contribution of $61.92 was made on 27 February
  • contribution processed and account opened today, 4 March 2014.
  • "optional" insurance is being paid for from my money.
Since 2010 when an account was first established for me a total of $727.34 has been contributed. From that, $274.20 has been paid out of my account for "optional" insurance that I don't want, didn't ask for and don't use. I pay for this insurance in another superannuation fund. Almost 40% of my meagre earnings have been given away without my permission. I'm happy to give money away, but I'd rather give it to a homeless person or a charity or an artist, not an insurance company. 

On 26 February the balance available to rollover was $284.20; a mere 39% of my money is left for me. 

I've been advised that it is not possible to have a default on any future accounts I have opened without my permission to not take out this "optional" insurance - the paper form is required every time; OR, I should be able to make the selection on the application form.

Application form? What application form? I don't believe I've ever completed an application form and will make a request to the privacy officer (by writing a letter and putting it in the post) requesting to see my records. That should be interesting.

So I went and looked at the application form. It gives me the opportunity to decide if I want to provide my tax file number, to select my beneficiaries, to NOT take up insurance and to choose my investment mix. Someone somewhere has made all these choices for me without any communication about what has happened or what it means. On reading the university's FAQ page about superannuation, I've discovered that I can also elect to reduce my employer contribution from 9.5% to 0% (and other amounts in between). Well this is good news! Surely I can just make this election and take the 9.5% out myself and pay it to my preferred fund? Well probably, but I'm sure there's some hideous tax implication that will erode my meagre earnings even further. Funny that no one has mentioned this as an option.

As it stands, whenever I am paid enough for the employer to make a superannuation contribution, an account will be opened and the insurance premiums will be calculated daily and deducted monthly from the moment the account is opened. I will only discover that superannuation has been paid when I receive a pay slip. Oh, wait, I haven't received a payslip for a few years. To get a payslip, I have to log into a system. The password expires every three months. I work there once every six months. This is not front of my mind. Anyway, by the time I discover I have a new superannuation account, money is already being deducted to pay for "optional" insurance. I will fill in TWO forms and put them in the post - one to cease the insurance and one to close the account and rollover the balance. Rinse and repeat. Indefinitely.

Is this sounding repetitive? Well it is. I wonder how happy members of the funds would be to know about this wasteful administration? I wonder how happy the insurance company (whose name I don't even know) is to receive lots of tiny amounts from unsuspecting and poorly informed superannuation members? 

On top of all of that, casual employees receive only 9.5% employer contribution, while others receive 17%! I just discovered that when I stumbled across this campaign. Despite being on the payroll (albeit as a casual) I have not had the opportunity to vote on the enterprise agreement which came into effect last year and expires in June 2017. It would seem this campaign is a little late. 

As discussed on a previous post, joining the union is not an option because I'd have to join four different ones to cover me in all my employment settings. Who can afford that? 

This is an example of casual employees not being considered in arrangements at all.  Yet we are essential to many programs in the universities. By all means, maintain the default fund arrangements for people other than casuals and provide the option for casual employees to nominate either UniSuper, or a different fund of our choosing. I'm flabbergasted that an enterprise agreement can override federal legislation about superannuation choice, given the impact it has, undermining the legislation.

I'm lodging a formal complaint, through the internal mechanism first, and will be contacting the university's superannuation officer tomorrow. I can write an email or do it over the phone, as well as write a letter and put it in the post.

Customer service doesn't seem to exist as a concept. I wonder if it will kick in as I move through the complaint process?

How informed are you about your superannuation? Do you have insurance you don't need or want? 

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