While superannuation bodies have welcomed the Government’s introduction of its super legislation to Parliament, they would like changes to be implemented quickly.
Federal Treasurer, Scott Morrison, introduced the bill to Parliament on Wednesday to enshrine the objective of superannuation to “provide income in retirement to substitute or supplement the Age Pension”.
“The objective for superannuation will enhance stability in the superannuation system by creating a clear framework for assessing superannuation policy,” he said.
The Association of Superannuation Funds of Australia (ASFA) said the legislation giving effect to tax changes to super should be passed without any undue delay to provide certainty and confidence in the system.
ASFA chief executive, Martin Fahy, said the proposed super measures would allow individuals with modest balances to make use of previously unused concessional contribution caps and allowing up to $100,000 a year non-concessional contributions were important to provide equity for people with broken work patterns.
“This legislation is an inflection point in superannuation policy that should allow people to move on and increase their confidence in the system,” Fahy said.
“ASFA agrees with the government that the fundamental objective of the system should be enshrined in law, however, ASFA also believes the goal of superannuation should be aspirational and should go further, to provide adequacy and comfort in retirement.”
The SMSF Association said the legislation was a step towards greater certainty for self-managed superannuation fund (SMSF) trustees and their advisers.
SMSF Association managing director and chief executive, Andrea Slattery, said: “With the legislation introduced to Parliament, SMSF trustees and their advisers can have greater certainty in beginning to adjust their superannuation strategies where necessary as the 1 July 2017 start date for most of the superannuation changes looms”.
“Improvements such as allowing recipients of reversionary pensions 12 months rather than the originally proposed six months to adjust their affairs for the new transfer balance cap and simplifying the capital gains tax relief provisions are welcomed,” she said.
Slattery noted that while the legislation had introduced a number of changes that limited the concessions for super it did have a number of positive changes.
“The changes allowing the carry forward of unused concessional contribution cap space and allowing all taxpayers to make deductible contributions to their superannuation are undoubtedly positives for the system,” Slattery said.
These changes greatly increase the flexibility for people contribution to super, especially for women who may have had broken work patterns, allowing greater opportunities to save for retirement.”
Challenger chief executive, Brian Benari, said it was important for the changes to be implemented quickly so that the industry could offer a wider range of products that could more efficiently provide for retirement needs.
“This legislation is a turning point. It will allow for a range of new products, including deferred lifetime annuities, which are building blocks for CIPRs [comprehensive income products for retirement). These should make a meaningful difference to the retirement lifestyle of older Australians,” Benari said.
