AUSTRALIA - The government has removed a six month restriction on super portability to better accommodate the movement of balances between funds in a choice of fund environment.
The amended Superannuation Industry (Supervision) Amendment Regulations 2005 will, from July 1, allow employees to port their super balance when changing funds without having to wait six months
Under the amended regulations, from July 1, employees will be able to port their super balance when changing funds without having to wait six months from the date of the last employer contribution.
But the move, announced by assistant treasurer Mal Brough, has been denounced as “weak and wimpy” by Nick Sherry, shadow minister for finance and superannuation, who called for major structural reform.
“Weak and wimpy is the Liberal government’s policy response to a massive structural failure in Australia’s super system,” he said.
“Removing the six-month wait is only one small step to removing the major barriers to portability. The size of the problem is well known and growing each year - 4.9m lost accounts containing AUS$7.3bn.
Brough said lifting the restriction would improve flexibility and consolidation of accounts.
“Together with the introduction of choice of fund, these regulations will give Australians greater control than ever over who manages their superannuation benefits,” he said. “These changes will also make it easier for members to consolidate multiple accounts - helping them to reduce the impact of fees and charges.”
The Labor party said high exit fees were the major wall to portability, calling for a ban phased out over time, automatic consolidation of the millions of “lost accounts” and tax file number notification to all super funds to allow this process.
The top stories this week were the High Court's decision to block the £12bn annuity transfer from Prudential to Rothesay Life, and a separate court ruling that 'raises the bar' for pension rectification exercises.
Guaranteed minimum pension (GMP) equalisation has soared to the top of pension schemes' to-do lists, with 58% stating it is a priority project, research from Equiniti has revealed.
Professional Pensions is holding its defined contribution (DC) conference on 4 September.