Inequities in superannuation for indigenous Australians

Cathy Binnington
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(Pictured: Cathy Binnington)

by Penny Pryor.

A cross-industry working group on indigenous issues in superannuation is putting together a discussion paper that will address some of the inequities of the system that effect indigenous Australians. The working group also hopes to develop a set of guidelines that will help deal with the systemic disadvantages that the system inadvertently imposes on this section of the community.

Cathy Binnington is acting senior manager of the Australian Securities and Investments Commission’s Indigenous Outreach Program, which was set up about five years ago to deal with some of the issues particular to indigenous communities.

“In the mid 2000s there were a few big cases that we ran that involved [financial] over commitment in some of the indigenous communities,” Binnington says.

Those cases related to such practices as Centrelink recipients being signed up for large car loans and other instances where it was blatantly obvious the customers had been mis-sold financial products.

As a result of those cases, ASIC commissioned a report in the late 2000s, which recommended a special indigenous unit be set up. It now has five members, four of which are indigenous Australians.

Superannuation falls under the unit’s remit and Binnington says some of the biggest issues around superannuation are related to identity checks and names.

“Last year we ran some forums with industry to really raise awareness of some of the issues that indigenous people face, particularly when they are identifying themselves,” Binnington says.

In some remote communities access to mail, Internet and even the telephone is difficult, which can create extra barriers.

“There is a whole complexity around that…what kind of processes can the super funds start thinking about to start dealing [with some of these issues],” Binnington says.

She stresses that superannuation representative associations have been very proactive.

“I know that the industry bodies, they have been very on board in trying to improve this and I think there are definitely some funds that are really across it.”

A small study conducted by the cross-industry working group of 27 funds found that 20 would be interested in participating in industry initiatives concerning indigenous Australians and their super.

Four funds had specific initiatives targeted at their indigenous members but just two funds could identify specific members as being Aboriginal or Torres Strait Islander.

Accessing insurance is a key issue with superannuation in indigenous communities and six funds indicated difficulties in this area. Names, dates of birth, difficulty in determining familial relationships, along with cultural issues, were identified as some of the problems with accessing insurance.

Binnington says multiple names, including a traditional name, may be used, and a historical lack of accuracy in recording birth dates can make finding records difficult.

Avoidance language around naming deceased people in the community, which extends to people with the same name as the deceased changing their name for a mourning period, is also another cultural practice that affects identification.

Executive manager, leadership and governance at the Australian Institute of Superannuation Trustees (AIST), Eva Scheerlinck, is on the cross-industry working group which includes representation from the major industry associations – Financial Services Council, AIST, Association of Superannuation Funds of Australia, Women in Super, Industry Super Australia – as well as retail and industry superannuation funds.

“One of the things that were looking at reviewing is the membership of that group. What’s blatantly obviously missing is indigenous representation,” Scheerlink says.

“The group probably formed about a year ago and we wanted to make sure we had a good understanding of what we were capable of doing and where different organizations were at before we did that indigenous outreach.”

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