Superannuation industry associations have welcomed draft legislation aimed at helping super funds use tax file numbers (TFNs) to identify members' accounts, but warned more needs to be done to reduce the billions of dollars in lost super.
"We welcome this first step in tackling Australia's $18 billion 'lost super' problem, but there is still a lot more work to be done," Australian Institute of Superannuation Trustees (AIST) chief executive Fiona Reynolds said.
AIST said it plans to file a submission to the draft TFN legislation - part of the Federal Government's wider Stronger Super reforms - that was released by Treasury on Friday.
"AIST's submission will look at important details such as how and when members must provide consent for fund consolidation and identification requirements to confirm the person's identity," Reynolds said.
"We will also recommend that the Australian Taxation Office (ATO) be resourced to provide a real time online tax file number verification tool for super funds. Currently, it can take more than a year to verify numbers with the ATO," she said.
The Association of Superannuation Funds of Australia (ASFA) said the TFN legislation was one of the minimum outcomes of Stronger Super.
"It's great to see SuperStream starting to be implemented, however, tax file numbers are only a partial solution," ASFA chief executive Pauline Vamos said.
"There will be many issues to consider including how tax file numbers will be verified and whose role it will be - the employer or the fund," she said.
"ASFA has recently revamped its policy sub-committees and they are poised and ready to review this latest legislation within the short time frame given," Vamos said.
The Financial Services Council response was more enthusiastic.
"The Government has taken a much needed step to clean up Australia's lost super issue," Financial Services Council (FSC) chief executive John Brogden said. "Soon the days of people having multiple superannuation accounts as a result of moving jobs will be over," Brogden said.
"This legislation should ensure that compliance is easier for employers," Industry Super Network chief executive David Whiteley said. "Consequently millions of super payments not currently paid to employees will be paid."
The use of TFNs as a primary identifier would, in association with other back office changes announced under SuperStream, reduce administration costs and help keep super fees low," Whitely said.
"This is further good news for members of Industry Super Funds where all profits are returned to members," he said.
The draft legislation will allow super funds to use TFNs as the primary form of identification from 1 July 2011.
Currently, an estimated 5.8 million super accounts have been lost, leaving $18.8 billion in retirement savings in limbo.
