Parliament today passed Bills introduced by the Gillard Government to deliver a range of improvements to superannuation law. The reforms include delivering superannuation capital gains tax relief and measures that implement the Government's Stronger Super commitments to improve the efficiency of the superannuation system.
The package of reforms being implemented by the Superannuation Laws Amendment (Capital Gains Tax Relief and Other Efficiency Measures) Bill 2012 and the Superannuation Auditor Registration Imposition Bill 2012 passed through Parliament today.
"The measures further build on the Government's existing reforms to improve the efficiency and integrity of the superannuation system, which will increase the retirement outcomes for Australians." Minister Shorten said.
Merging superannuation funds
Schedule 1 of the Bill restores the temporary tax relief in the form of loss relief and asset roll-over for mergers of superannuation funds with some changes. From 1 October 2011 to 1 July 2017, superannuation funds that merge can roll-over unrealised gains or losses on revenue and capital assets and allow the transfer of realised revenue losses and capital losses.
This taxation relief removes certain tax impediments to superannuation funds merging to achieve efficiencies and cost reductions for members in response to the Stronger Super reforms.
SMSF auditor registration
Schedule 2 of the Bill will establish a new registration regime for self-managed superannuation fund (SMSF) auditors, commencing on 31 January 2013. The measure will require auditors to register with ASIC and satisfy a range of minimum standards.
"As part of SMSF auditor registration, all auditors of SMSFs will be required to meet initial and ongoing requirements relating to their qualifications, competency and independence," Minister Shorten said.
The SMSF sector currently has over $400 billion and SMSF members are advised by a range of experts including SMSF auditors.
"Given the important role auditors play in regulating the SMSF sector, auditor registration will improve the integrity of the SMSF sector by ensuring that all SMSF auditor are subject to the same minimum competency standards."
The introduction of this registration regime will deliver on a key part of the Government's SMSF Stronger Super commitments.
Further details of the registration regime, including transitional arrangements, will be outlined in regulations.
Expanded superannuation reporting
Schedule 3 of the Bill will expand the information required to be reported by superannuation providers in respect of their members.
Under the revised reporting obligations, superannuation providers will be required to provide statements for all members who held an interest in the fund at any time during the reporting period, not just those for whom contributions are received.
This measure will allow the ATO to display more comprehensive superannuation information to individuals and facilitate consolidation within and between funds.
Improving efficiency and data quality in the superannuation system
Schedule 4 of the Bill will improve the quality of information in the superannuation system, and facilitate fully effective electronic processing of transactions.
As part of the Government's SuperStream package of reforms, a number of measures were announced to improve the efficiency of the superannuation system. The Government legislated standards for superannuation transactions in June this year, and this legislation will ensure the effectiveness of these standards.
"It has been estimated that the Australian superannuation industry processes more than 100 million transactions annually. The potential gains to the system from the effective electronic processing of transactions in superannuation are significant," Minister Shorten said.
Currently poor member information quality leads to difficulties in allocating contributions, unnecessary duplicate accounts and a large amount of lost and unclaimed superannuation.
This legislation supports the industry in achieving the goals of processing transactions efficiently and improving information quality. The Commissioner of Taxation will provide two key services:
- A central register containing accurate and secure details of superannuation funds which is critical to conducting electronic transactions, and
- A tax file number validation service which can be used by employers and trustees to ensure the information they hold for their employees and members is correct.
"It is estimated that the SuperStream proposals could save the industry and, therefore, members of superannuation funds up to $1 billion per year. Much of the benefit of these savings should flow through to members in the form of lower fees and charges."