POWERED BY MOMENTUM MEDIA
Inactive super grab inconsistent with reforms
The Federal Government's decision to lift the threshold at which inactive superannuation accounts are transferred to the Australian Tax Office (ATO) is inconsistent with superannuation reforms and unfair to those with low account balances, according to the Financial Services Council (FSC).
The Financial Services Council (FSC) was responding to an announcement by the Federal Government in its Economic Statement on Friday that the threshold of small inactive superannuation accounts, including those ‘lost' to members, would increase from $2000 to $4000 from 31 December 2015, and then to $6000 from 31 December 2016.
FSC chief executive John Brogden said the council opposed the measure and that "Governments should be consolidating peoples' superannuation, not putting it into consolidated revenue".
Brogden said the announcement was inconsistent with superannuation reforms and would target those who had only begun to accumulate superannuation.
"This Government's own SuperStream reforms have made it easier to bring accounts together. It will unfairly capture the savings of many young and low incomes in particular," Brogden said.
According to the statement the rationale for transferring these funds to the ATO is "to protect the real value of more lost superannuation accounts".
However it also appears to have a budgetary motive, with the statement also claiming that "this measure is estimated to have a net positive impact on the Budget in underlying cash balance terms of $582 million over the forward estimates".
AUTHOR
Jason Spits
Jason has been writing on financial services since 1999 and has worked for on a number of trade media titles in both a full time and freelance capacity. He joined Money Management and Super Review in 2013 in the role of Senior Journalist.
Recommended for you
The two funds have announced the signing of a non-binding MOU to explore a potential merger.
The board must shift its focus from managing inflation to stimulating the economy with the trimmed mean inflation figure edging closer to the 2.5 per cent target, economists have said.
ASIC chair Joe Longo says superannuation trustees must do more to protect members from misconduct and high-risk schemes.
Super fund mergers are rising, but poor planning during successor fund transfers has left members and employers exposed to serious risks.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
88.01 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
72.60 3 y p.a(%)
3
Global X GlobalX FANG+ ETF
44.46 3 y p.a(%)
4
Pengana High Conviction Equities B
39.12 3 y p.a(%)
5
Pengana High Conviction Equities A
39.05 3 y p.a(%)
