The Association of Superannuation Funds of Australia (ASFA) said today that the sensible changes made last night in the Senate to superannuation legislation would deliver better retirement outcomes for Australians, particularly having the ATO reunite members with their superannuation within 28 days.
“ASFA has consistently advocated for swift consolidation of superannuation held by the ATO into members’ active accounts. Consumers should be earning market returns in their own account rather than have their money sitting at the ATO earning CPI,” said ASFA CEO, Dr Martin Fahy.
The legislation also recognises a broader range of circumstances where members have engaged with their fund or elected not to have their balances transferred to the ATO, making it easier for consumers to stay with their fund and benefit from higher investment returns.
In addition, the reforms extend the timeframe for defining an inactive account from 13 months to 16 months before funds are automatically transferred to the ATO.
“Extending the timeframe appropriately recognises that people take time out of the workforce, such as for parental leave, which results in extended periods where they are not able to contribute to superannuation.”
The carve out of young people from group insurance that was originally proposed would have had an impact across the board, but particularly on those in high risk occupations and for those young people with dependants.
“There is clear evidence that insurance in superannuation is one of the most cost and tax-effective options to provide protection, particularly for the young and low-income earners,” said Dr Fahy.
“Many young people have dependants and financial commitments so in the instance of a tragic event occurring, particularly disablement early in life, having insurance in place is extremely valuable.
“We will continue to work constructively with all sides of politics on these important policies going forward,” he concluded.
For further information, please contact:
Katrina Horrobin, 0451 949 300.
ASFA is the peak policy, research and advocacy body for Australia’s superannuation industry. It is a not-for-profit, sector-neutral and non-party political, national organisation. ASFA’s mission is to continuously improve the superannuation system so people can live in retirement with increasing prosperity.