The Federal Government will today gazette amended superannuation portability regulations after having reached agreement with the Australian Democrats on the consolidation of benefits from inactive accounts.
The regulations will differ from those disallowed by the Senate just over two weeks ago in that they deal only with inactive accounts rather than allowing portability between active accounts provided a minimum balance was left in the original active account.
The regulations to be gazetted by Senator Coonan today reflect substantial compliance with the recommendations of the recent report by the Senate Select Committee on Superannuation which urged strict limitations on portability out of active superannuation accounts at the same time as recommending that portability from active accounts be handled via legislation for choice of fund.
At the same time as announcing that she would be gazetting the new regulations today, Senator Coonan announced the Government would not be moving on choice of funds legislation until July, 2005.
“Portability and choice of fund do share some common goals but are independent policies. Choice of fund is about allowing employees to direct where their employer contributions are paid,” she says.
“In order to provide employers with adequate lead-time to prepare for superannuation choice and allow sufficient time for the education process, the Government will defer the start date for its proposed Choice of Fund legislation to 1 July 2005,” Senator Coonan says.
The Australian Democrats only moved to support last month’s disallowance of the Government’s original superannuation portability regulations when Senator Coonan indicated she was not prepared to amend them consistent with the Committee recommendations.
The Committee said that while it supported the principle of portability and the ability of individuals to consolidate their superannuation accounts, this was in relation to inactive accounts.
