Major superannuation administration company, Link Group has claimed a likely $55 million impact from the Federal Government’s Budget superannuation changes which would see super balances of less than $6,000 directed to the Australian Taxation Office (ATO).
In an announcement to the Australian Securities Exchange (ASX) today, Link Group said it had undertaken an internal verification of accounts as at 30 April with member balances of less than $6,000 and where there had been no contribution for 13 months or longer.
It said if the so-called ‘sweep date’ under the Budget changes had been 30 April, this year, “the estimated unmitigated full-year revenue impact to Link Group would have been approximately $55 million”.
Link said that based on initial feedback from its clients, superannuation funds planned to actively engage with their members to address the issue.
“The opt-in process for life insurance and the anticipated active member engagement by funds may materially reduce the number of accounts transferred out under the proposed changes,” it said.
“In the event that there is a material decrease in member numbers, at that time, volume protections are expected to be triggered in the majority of Fund Administration contract,” the Link announcement said.
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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