The Morrison Government will build on its record of protecting and reuniting Australians with their lost and forgotten super with legislation to facilitate the exit of eligible rollover funds (ERFs) from the industry by 30 June 2021 and allowing the Australian Taxation Office (ATO) to reunite amounts it receives from ERFs with their rightful owners sooner.
These changes are another step forward in addressing the issue of unnecessary duplicate accounts in the superannuation system, lowering fees and charges, and are consistent with the Productivity Commission’s recommendation, in its report Superannuation: Assessing Efficiency and Competiveness, that ERFs be wound up within three years.
While ERFs are subject to the Government’s Protecting Your Super reforms which require them to transfer inactive low balance accounts to the ATO, they are unable to voluntarily transfer other amounts to the ATO which restricts their ability to exit the market.
Legislation will therefore be introduced into Parliament early next year to permit ERF trustees to voluntarily transfer any amount to the ATO. The legislation will also require them to transfer all accounts below $6,000 by 30 June 2020 and to transfer any remaining accounts still residing in an ERF to the ATO by 30 June 2021.
This measure will build upon the success of the Government’s Protecting Your Super reforms which have resulted in the ATO proactively reuniting more than 2.13 million accounts worth around $2.79 billion with their rightful owners, around a month after their commencement.
This includes approximately 1.54 million accounts worth $2.49 billion that have been transferred into individuals’ active super accounts, and just over 595,000 accounts worth $303 million paid proactively into individuals’ bank accounts – a power that only the ATO has.
The ATO’s data matching program has generated results far exceeding those previously achieved by ERFs, which house millions of inactive and forgotten superannuation accounts. By reuniting these lost accounts with their rightful owners, members will benefit from higher account balances and no longer be paying multiple sets of fees.
Through these changes, the Coalition is building a stronger and more efficient superannuation system for all Australians.