Key industry bodies have thanked the Federal Treasury for making key amendments to legislation which will underpin Reversionary Transition to Retirement Income Streams (TRISs) and therefore reduce administrative complexity.
Both the Association of Superannuation Funds of Australia (ASFA) and the Financial Planning Association (FPA) have used written responses to the Treasury to praise the legislative changes having pointed to the likelihood that large superannuation funds will face significant complexities if changes are not implemented.
ASFA said it had been approached by many superannuation providers who had expressed significant concerns “about the outcomes under the legislation, as currently enacted” and requesting that changes be made to ensure that “the outcomes for affected members are appropriate and that providers do not incur a substantial, unnecessary, burden in administering the provisions”.
The ASFA response said its members supported the policy rationale underlying the Draft Legislation to remove the inequities between different types of members and to make the treatment of reversionary TRISs more consistent with the treatment of other reversionary income streams.
It said the Draft Legislation effectively removed the requirement for reversionary TRISs members, during a time of bereavement and loss, to have to take additional action to commute the reversionary death benefit income stream to a new income stream in order to be able to retain the appropriate tax treatment.
“The proposed changes also serve to reduce significantly the operational challenges for superannuation providers of administering the legislative requirements as currently drafted,” it said. “Overall, our members strongly support the proposed amendments contained in the Draft Legislation and consider they achieve their stated objective.”