Uncertain trustees holding off on member transfers
Super fund trustees have been restricted from completing fund transfers for some members, even when it has been in the best interest of members, as a result of concerns about the loss of the member's benefit.
The claim has been made by the Association of Superannuation Funds of Australia (ASFA) in a submission to Treasury on providing certainty for superannuation fund mergers under changes to the Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill 2014.
ASFA's main concern in the submission is that while accrued default amounts (ADA) need to be transferred to MySuper regime compliant funds between 1 July 2013 and 1 July 2017 the proposed amendments have moved the relief offered to 1 July 2015.
"We also note that there will be a tension with having a 1 July 2015 start date as it will effectively force trustees to consider delaying some ADA transfers despites APRA's expectation that ‘the attribution of accrued default amounts to a MySuper product would occur at the earliest opportunity possible where it is in the best interests of beneficiaries to do so'," ASFA said in the submission.
ASFA also pointed out that while current industry practice and the proposed amendments allow for a superannuation income stream to be ceased, transferred and re-established under a successor fund transfer (SFT) current social security law is at odds with this and instead allows for the grandfathering of income streams under a SFT.
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.
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