AUSTRALIA - The Australian Government has proposed super funds use tax file numbers (TFNs) to identify members' accounts to help recover the ‘lost' A$18.8bn ($19bn) in superannuation assets.
The draft legislation, known as SuperStream, will enable funds to use the TFN to identify member accounts from 1 July 2011. If passed, the initiative could save up to 25% on superannuation administration costs which amount to A$1bn per annum, research by Ernst & Young showed. An estimated 5.8 million super accounts are lost each year, meaning the superannuation fund has no way of contacting the owner. Members can currently submit their TFNs but cannot use it to identify accounts or assist with consolidation of accounts between and across funds, according to the draft.
Assistant treasurer and minister for financial services and superannuation Bill Shorten said: "This measure, honouring an election commitment, will make it easier for Australians to be re-united with their superannuation, whether it is sitting in a lost account or in multiple accounts in various funds."
The proposal has been supported by the Australian Institute of Superannuation Trustees and who said TFN verification would reduce administrative errors. The Association of Superannuation Funds (AFSA) also welcomes the legislation but said this is only part of the solution.
AFSA chief executive Pauline Vamos said: "There will be many issues to consider including how TFNs will be verified and whose role it will be - the employer or the fund? Super must, and needs to, have its own governance body in regards to data and payment standards. The banking and accounting industries have similar bodies and it is now time for the superannuation industry to also have one in recognition of its footprint across the economic landscape."
The proposal will be subject to strict privacy guidelines. Consultations will close on 17 February 2011.
Fixed-income ETFs are helping pension schemes tailor their fixed income exposure. Bryon Lake, Head of International ETFs at J.P. Morgan Asset Management, explains how.
The Pensions Regulator (TPR) has set out plans to use "new regulatory initiatives" with over 1,000 schemes as it aims to tighten its regulatory grip and boost member outcomes.
HM Revenue and Customs (HMRC) has announced it is delaying the provision of data that will enable pension schemes to confirm the guaranteed minimum pension (GMP) benefits to pay to members until the end of the year.
This week's top stories include an article on climate activists from Extinction Rebellion crashing the PLSA's local authority conference, and an in-depth piece on the Court of Appeal's ruling on the BIC UK Pension Scheme case.