The Association of Superannuation Funds of Australia (ASFA) today welcomed the completion of the merger of StatewideSuper and Local Super, creating a $4 billion, 160,000-member superannuation fund that will be the leading industry fund based in South Australia and the Northern Territory.
"Superannuation fund mergers have the capacity to deliver benefits to superannuation fund members through the ability to generate economies of scale," said ASFA CEO Pauline Vamos.
"Mergers such as the one that has been completed today would not have been possible without the Federal Government providing capital gains tax (CGT) relief upon merger.
"We acknowledge Minister Shorten for providing CGT merger relief as part of the implementation of the Government's Stronger Super reforms. Mergers such as the one that has taken place today, that deliver significant benefits to fund members, could not have taken place without CGT relief," said Ms Vamos.
Many superannuation funds are still carrying deferred taxation assets as a result of the volatility of investment markets since the global financial crisis. In the event of a superannuation fund merger, without the provision of CGT relief, the value of deferred taxation assets to a fund is lost. ASFA's analysis is that without CGT relief the loss to members in many cases could be thousands of dollars.
John O'Flaherty, CEO of StatewideSuper, on behalf of both funds said he would like to acknowledge the decision made by Minister Shorten to provide CGT relief. Without this relief, the merger of StatewideSuper and Local Super would have most certainly been delayed, which could have had a negative impact on the long-term benefits for both funds' memberships.
"StatewideSuper and Local Super actively participated in ASFA's recent lobbying of the Federal Government regarding gaining CGT relief for merging superannuation funds. The Federal Government granted this relief, which allowed StatewideSuper and Local Super to merge from 1 July 2012. We would also like to recognise the contribution of Senator Penny Wong in the Government's decision-making process on CGT relief," said Mr O'Flaherty.
For media inquiries, please contact:
Pauline Vamos, CEO, 0433 169 342
Rebecca Glenn, GM Marketing and Communications, 0416 170 439
Megan McDougall, Media and Communications Coordinator, (02) 8079 0849
About ASFA - the voice of super
The Association of Superannuation Funds of Australia is the peak industry body for superannuation and retirement policy and research. ASFA is the only organisation that represents all types of superannuation funds (retail, industry, corporate and public sector) and associated service providers. ASFA members manage or advise on the bulk of the $1.3 trillion in superannuation assets as at September 2011. Its members represent over 90 per cent of the approximately 12 million Australians with superannuation.