***Updated*** The Superannuation Laws Amendment (MySuper Capital Gains Tax Relief and Other Measures) Bill 2013 passed through the Senate last night.
Introducing the Bill to the lower house on 29 May 2013, Minister for Financial Services and Superannuation Bill Shorten said the Bill would “ensure default members of superannuation funds are not adversely affected if their account balances are compulsorily transferred to a MySuper product in another fund as a result of the MySuper reforms”.
Superannuation funds that do not offer a MySuper product are required to transfer their default members’ account benefits to a fund offering a MySuper product by 1 July 2017.
“This measure allows the superannuation fund to transfer any tax losses and defer an income tax liability for assets transferred to the other entity,” said Mr Shorten.
In a submission to the Senate Economics Legislation Committee, the Association of Superannuation Funds of Australia (ASFA) argued that members should be allowed to provide a notice to the receiving fund to split contributions prior to the compulsory rollover being undertaken.
Furthermore, ASFA argued that the CGT relief should be ongoing (ie, beyond the implementation deadline for MySuper) so that members will not be disadvantaged if their fund chooses to merge.
“Why should members whose funds are merged outside a transition period bear the cost of CGT tax, whilst members of funds who merge during a transition period do not?” said the ASFA submission.
The Australian Institute of Superannuation Trustees and the Industry Super Network supported the relief contained in the Bill, while pointing out: “It is important to note that where funds are able to merely re-label their existing default options as a fully compliant MySuper option, these issues wouldn’t arise.”
