The government passed four Bills, one of which – the Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Bill 2013 – contains the final details of the MySuper regime.
Association of Superannuation Funds of Australia (ASFA) chief executive Pauline Vamos said a “substantial number” of the “complex” changes to the operation of superannuation funds begin on 1 July 2012.
Ms Vamos called for “regulatory pragmatism” when it came to the implementation of reforms contained in the Service Providers and Other Governance Measures Bill.
Industry Super Network (ISN) acting chief executive Matthew Linden pointed out that there is already a transition plan in place for the MySuper rollout.
“There are strict requirements – around MySuper particularly – that aren’t really triggered until 1 January 2014,” said Mr Linden.
The ISN’s discussions with the Australian Prudential Regulation Authority (APRA) have led Mr Linden to believe the regulator will be “quite reasonable”.
“Every indication suggests thus far that there’s going to be a workable and reasonable approach adopted for the implementation of these changes – and funds will welcome that,” he said.
The government also passed three other Bills related to superannuation last night, which Minister for Financial Services and Superannuation Bill Shorten said marked the completion of the government’s “reform agenda”.
The Tax and Superannuation Laws Amendment (Increased Concessional Contributions Caps and Other Measures) Bill will increase the concessional contributions cap to $35,000 for the 2013/2014 financial year for individuals aged 60 and over, and to $35,000 for the 2014/2015 financial year for individuals aged 50 and over.
The Superannuation (Sustaining the Superannuation Contribution Concession) Imposition Bill 2013 imposes a 15 per cent tax on income earners whose income and concessionally taxed superannuation contributions exceed $300,000 for an income year.
The Superannuation Laws Amendment (MySuper Capital Gains Tax Relief and Other Measures) Bill 2013 amends the Income Tax Assessment Act1997 to provide relief to superannuation funds where there is a mandatory transfer of a default members’ account balance to a MySuper product in another superannuation fund.
MLC head of technical services Gemma Dale said the reforms would provide a boost for employees (who will see a boost to their superannuation guarantee), older people (who will be able to contribute more) and lower income earners (who will have the 15 per cent tax on their super contributions refunded).
“For example, people earning an annual salary of $37,000 would accumulate an additional $50,000 in super over the next 20 years under the new minimum superannuation guarantee and refund of contributions tax. For those earning $150,000, the additional super would be more than $173,000 after 20 years”, said Ms Dale.
