The Association of Superannuation Funds of Australia (ASFA) made 13 recommendations in a response to Treasury, and outlined several key concerns.
“[We] consider that generally they will achieve the policy objective as stated and facilitate the movement of superannuation savings between the two countries,” ASFA stated.
“However, we have three high-level concerns with the regulations: the structure of the regulations, uncertainty as to the commencement date and uncertainty as to whether, and if so, in which circumstances transfers to KiwiSaver Schemes are compulsory. The lack of clarity creates the potential for confusion among trustees, members and administrators.”
ASFA said there was “a complete lack of visibility to fund trustees as to the actual implementation date to which they are working”, as well as a lack of clarity over whether a trustee has the option to prevent payment of a member’s benefit to a KiwiSaver Scheme in circumstances where a rollover to an Australian regulated fund by the member would be permitted.
The association was also concerned about the complexity of the explanatory memorandum addressing how the provisions were to be administered and the complexity around the amount of information an Australian trustee is required to have before it can be satisfied funds can be released to a KiwiSaver scheme.
ASFA also pointed to a potential contradiction within the draft regulations, and a lack of clarity over what data standards are applicable when rolling over a member benefit that includes a New Zealand-sourced component.
The association suggested inserting paragraphs at relevant parts of the Superannuation Industry (Supervision) Act to remove some uncertainty, and requested clarity over a number of other measures as well as an announcement regarding the implementation date as soon as possible.
The Australian Institute of Superannuation Trustees (AIST) broadly supported the draft legislation but expressed concern that New Zealand-sourced retirement savings will be treated as non-concessional contributions upon entry into Australia.
AIST is also concerned about the amount of information an Australian trustee would be expected to gather before transferring monies. This would compromise the objective of creating a seamless trans-Tasman labour market, AIST stated.
AIST also flagged what it saw as a lack of flexibility in the arrangements for super trustees.
