Moves from the Morrison Government to amend the Protecting Your Super (PYS) reforms to allow for the aggregation of members’ interests in one or more products held within a super account, and to ensure the rights of members under fixed term insurance cover aren’t affected and cover isn’t inappropriately removed, have been welcomed by the superannuation industry.
The Association of Superannuation Funds of Australia (ASFA) said that the changes would strike a “sensible balance” between protecting low balance accounts and retaining the investment and insurance benefits of the superannuation system.
“These pragmatic changes align the legislation with consumers’ understanding of their superannuation and reflect how people typically manage their superannuation affairs,” ASFA deputy chief executive, Glen McCrea, said, noting that the changes addressed concerns the industry had raised with the practical implementation of the reforms.
“They also make the legislation less costly and simpler to administer, promoting system efficiency,” he added.
At the same time, ASFA also praised the positive impact of downsizer contributions on retirement incomes, following Assistant Treasurer, Michael Sukkar, releasing figures showing that contributions had reached the $1 billion mark since the downsizer policy commenced on 1 July, last year.
“ASFA supported the Downsizer measure as a means of making it easier for retirees who sell their family home to invest in their super to secure a comfortable retirement,” McCrea said. “We are encouraged to see Australians use the measure to improve flexibility and living standards in retirement.”
The downsizer measures meant that retirees could make a non-concessional contribution into their super of up to $300,000 from the proceeds of selling their home, on top of the contributions already allowed under existing caps.
The research house has offered a silver lining after super fund returns saw the end of a five-month streak last month.
A survey of almost 6,000 fund members has identified weakening retirement confidence, particularly among those under 55 years of age, signalling an opportunity for super funds to better engage with members on their retirement journey.
The funds have confirmed the signing of a successor fund transfer deed, moving closer to creating a new $29 billion entity.
A number of measures, including super on Paid Parental Leave, funding to recover unpaid super, and frameworks to encourage investment in the energy transition, have been welcomed by the superannuation industry.
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