The long heralded choice of funds in superannuation is close to being signed off by the Democrats and Government, according to the assistant treasurer Rod Kemp.
Speaking at a recent Australian Superannuation Funds Association (ASFA) lunch, Kemp said he was not in a position to outline the details of the discussions but felt they were close to reaching a conclusion.
“This government went to two elections promising choice of funds and there have been long negotiations but the discussions have been productive and examined every aspect of choice,” Kemp said.
The move to choice has been well received by industry, employers and employees, according to Kemp, but the Government wanted to ensure people were in a position to make educated choices about superannuation.
“Superannuation is about the employees and we will have a program to deliver employees an educated choice,” Kemp says.
“Choice of fund is the next major reform in this sector so these considerations are important.”
Other issues which have also been flagged by the Government include the prospect of default fund choice where no active choice has been made; the simplification of super funds; and the elimination of churning.
Kemp said these were all covered in discussions but the focus was with portability of superannuation and access to superannuation funds before retirement.
Changes to preservation arrangements have already been passed allowing access to super funds in time of illness or hardship but Kemp says the Government was not prepared to go further.
“These changes were agreed on by all parties and we feel they work well but the ongoing philosophy is that superannuation is a retirement income system,” Kemp says.
