Australia’sindustry based superannuation funds have strongly rejected what they regard as the Federal Government’s “pre-emption of due process” by regulating for superannuation portability.
Association of Superannuation Funds of Australia(ASFA) chief executive Philippa Smith described the Government’s move as “extraordinary” in circumstances where a Senate Committee had been concurrently dealing with the issue.
“And it is possible that the Government might have kicked an own goal because I would have thought that the Senate would have no choice now but to disallow the regulations,” she says.
Smith says she regarded the Government’s announcement, which occurred at the same time as the matter was being heard by a Senate Committee, as “a pre-emption of process”.
However, the Government’s move was welcomed by theInvestment and Financial Services Association(IFSA), which described the initiative as timely, and with more than adequate consumer protections.
IFSA chief executive Richard Gilbert says the regulations quite properly deliver consumer sovereignty and this is welcome at a time when there has been ongoing concerns expressed about fees and charges.
The Minister for Revenue and Assistant Treasure, Senator Helen Coonan, announced last Thursday that the Government had gazetted regulations to give effect to its portability of superannuation policy.
The main features of the regulations were that portability should apply to accumulation funds and fully funded defined benefits funds where a member has ceased employment with the employer sponsor of the fund.
However, portability would not be applied to unfunded public sector superannuation schemes, self-managed superannuation funds and benefits being paid as a pension.
Smith says the regulations, as gazetted, seemed likely to create more superannuation accounts rather than fewer and it was inappropriate to be talking about portability without, at the same time, talking about choice of fund.
