Super Update

Super legislation update

As part of the stronger Super reforms, Treasury has released draft regulations to support legislation providing for the expanded use of tax file numbers (TFNs) to enable superannuation fund trustees to use TFNs as a primary locator of member accounts, and from 1 January 2012, in order to facilitate consolidation of multiple member accounts. Members are encouraged to provide their TFN to HOSTPLUS and we will assist members to find their lost Super. With the consolidation of multiple super accounts you only pay one set of fees which means more money for your retirement.

The Assistant Treasurer has announced the Tax Office will further develop the electronic form for lost superannuation accounts to make consolidating lost super even easier. A new electronic form will make it easier to connect account holders with lost super accounts. The new process will enable members to visit the Tax Office website and fill in a simple electronic form to consolidate their super. There will be a verification process using data supplied by the member. This should make it simpler and easier for people to claim their lost super. People can check whether they have lost super by visiting the Tax Office website www.ato.gov.au/superseeker.

The Government made several key announcements concerning superannuation as part of its Mid-Year Economic and Fiscal Outlook (MYEFO) on 29 November 2011:

• The new ‘low-income super contributions’ (LISC) which will ensure that all those earning up to $37,000 can qualify for the Government contribution (of up to $500), regardless of whether they file a tax return. This measure aims to take place from 1 July 2012.
• The Government has also announced that it will scale back the Co-Contribution Scheme by reducing the matching rate to 50% with a maximum co-contribution of $500 for people with incomes up to $31,920 in 2012 -13 (with the amount phasing down for incomes up to $46,920). This measure takes effect from 1 July 2012 when the new LISC commences.
• It has also announced a pause to the indexation of the super concessional caps for one year in 2013-2014 so it remains at $25,000.

The Government has announced on 29 November 2011 a further extension of draw-down relief for self-funded retirees, with a 25 per cent reduction in the minimum payment amounts for account based pensions to the 2012-13 year. This measure acknowledges that equity markets have continued to remain volatile.

The Government announced on 29 November 2011, that from 1 July 2013, eligible employees aged 70 and over will receive the superannuation guarantee for the first time. Making superannuation contributions compulsory for these mature-age employees will improve the adequacy and equity of the retirement income system, and provide an incentive to older Australians to remain in the workforce for longer.

The recent introduction into Federal Parliament of the Superannuation Guarantee (Administration) Amendment Bill to increase the SG from 9 to 12 per cent represents a milestone for Australia’s compulsory superannuation system.

The government new reforms divided into the four streams being MySuper, SuperStream, Governance and SMSFs - touch on just about every aspect of modern superannuation as we know it and amount to the biggest overhaul to our industry in two decades. The package is essentially designed to improve the delivery of superannuation to all Australians, address the lost super problem and ensure that the retirement savings of those who are not actively engaged with their super are invested in commission-free, value-for-money default funds. It also introduces a timetable for the uptake of mandated data standards and e-commerce among funds and employers. HOSTPLUS is abreast with development in this space and will keep members informed on the developments in the near future.

Assessment of early release of Super on compassionate grounds has been transferred from APRA to Department of Human Services (DHS). APRA will no longer assess the claims sent in by members on compassionate grounds. Affected members can refer to www.humanservices.gov.au or phone 1300 131 060 for more information on how to apply for early release of super on compassionate grounds.