AUSTRALIA - The Association of Superannuation Funds of Australia (ASFA) has given the thumbs up to draft regulations outlining obligations for employers and employees ahead of the introduction of the choice of fund legislation.
Assistant treasurer and minister for revenue, Mal Brough (pictured), said: “ This is about making sure we consult with employers, employees and industry groups every step of the way to make the transition to choice a smooth one.
“The standard choice form will provide a guide to the information employees need to consider before choosing a super fund. It will be simple to complete for employers and will explain what an employee has to do to make a choice.”
CEO of ASFA, Philippa Smith, commented: “This is the first step in what is going to be a very intensive implementation period for super funds, employers and consumers.
“It is clear that the Treasury have listened to the industry – these draft regulations reflect comments made by the sector to the November fund consultation paper.”
The Choice of Fund Act, which will give many employees the right to choose which super fund their compulsory super contributions are paid into, comes into effect on July 1.
While generally supporting the draft regulations, Smith voiced concern over a provision for retirement savings accounts (RSAs).
“One issue of concern is the inclusion of RSAs in the default fund category,” she said.
“We believe that all default funds should offer a life insurance component and RSAs do not.
“More generally, ASFA believes the insurance arrangements in particular are sensible because they allow for the flexibility of arrangements that currently exist, ie appropriate insurance cover will be provided and most funds will be able to continue as they are and still be a default fund.”
Deadline for submissions is February 14.
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