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Link identifies high cost of Budget changes
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.
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