MySuper to force rationalisation
MySuper will result in product rationalisation to achieve economies of scale, according to the Australian Institute of Superannuation Trustees (AIST).
In a submission to the Treasury arguing for the retention of capital gains tax (CGT) rollover relief for merging superannuation funds, AIST chief executive Fiona Reynolds said it was intended that "MySuper will result in product rationalisation to further contribute to obtaining economies of scale".
"This will be a driver of fund rationalisation," the AIST submission said.
It said that the absence of CGT relief in such circumstances would act as a brake on delivering economies of scale and driving efficiencies within the superannuation system.
"It is indisputably bad policy where its absence is the primary driver inhibiting a merger," the submission said.
It said that many AIST members continued to carry forward deferred tax assets of more than one per cent of funds under management, and in some cases significantly more.
"The realisation of thee losses would be a significant cost impost for super funds and their members on top of MySuper transition costs, and the costs of other regulatory change," the AIST submission said.
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