The Government has secured another win for superannuation reform after negotiating an agreement with the Australian Democrats to support new portability regulations to facilitate the consolidation of superannuation from inactive accounts.
“The Government is willing to listen and negotiate in order to deliver key election commitments and necessary reforms,” Senator Coonan said.
“This demonstrates the Government’s commitment to portability was never about achieving so called ‘back door choice’ but instead is about allowing workers to benefit from consolidating their superannuation.”
Portability and Choice of Fund do share some common goals but are independent policies. Choice of fund is about allowing employees to direct where their employer contributions are paid.
In order to provide employers with adequate lead-time to prepare for superannuation choice and allow sufficient time for the education process, the Government will defer the start date for its proposed Choice of Fund legislation to 1 July 2005.
Portability is about enabling workers, if they so desire, to bring together their superannuation savings in disparate accounts and to save on multiple fees and charges. Many funds already offer portability of their own accord, the regulations simply extend this to all funds.
“With the support of the Australian Democrats the Government is committed to delivering three key tranches of the superannuation reform package it took to the last election – co-contributions for low income earners, a reduction in the superannuation surcharge and portability of superannuation,” Senator Coonan said.
“Despite the disallowance of the original portability regulations, the Senate Select Committee on Superannuation in fact unanimously supported the ability of individuals to consolidate their superannuation accounts which will be achieved by the amended regulations. I call on the ALP, Australian Greens and the independent senators to also support these necessary reforms.
“Portability ensures workers can take control over their superannuation and develop a sense of ownership over these savings. The ability to move benefits rather than being subject to arbitrary rules imposed by a fund will no longer be the privilege of a fortunate few. It also places appropriate competitive forces on funds to ensure they are offering their members the best services.”
Amended portability regulations will be gazetted tomorrow that allow consolidation of superannuation from inactive accounts. The Government’s original portability regulations, which were disallowed, permitted consolidation of superannuation from both active and inactive accounts.