The Association of Superannuation Funds of Australia (ASFA) welcomes the passage of important legislation that will avoid adverse tax consequences when superannuation funds merge.
ASFA CEO, Dr Martin Fahy, said: “ASFA strongly supports a superannuation industry that is competitive and continuously improving its productivity and efficiencies. One effective means by which a fund can achieve scale efficiencies is through consolidation or merger”.
Until now, tax relief for merging funds has been provided as a temporary measure. The relief has been extended several times, with the most extension due to end on 1 July 2020.
The temporary nature of the relief has not reflected the reality that mergers typically take some time to complete. It has also meant that trustees have not always had certainty about whether tax relief would be available, when considering whether a potential merger would be in members’ best interests.
“ASFA has, over a long period, highlighted the absence of ongoing tax relief for mergers as a barrier to fund consolidation, and welcomed the Government’s 2019 Budget announcement that it would make the tax relief permanent,” Dr Fahy said.
The passage of the Treasury Laws Amendment (2020 Measures No.1) Bill 2020 will provide vital certainty to the industry and ensure that tax implications do not impede mergers that would otherwise be in the best interests of superannuation fund members.
For further information, please contact:
Jacqui Maddock, 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 all Australians can enjoy a comfortable and dignified retirement.