With Industry Superannuation Funds (ISFs) set to overtake Self-Managed Super Funds (SMSFs) as the largest sector in Australian superannuation, Australians need the Coalition Government's Protecting Your Super Package (PYSP) and Member Outcomes No. 2 Legislation passed more than ever.
Millions of people will be better off under the Government's superannuation reforms.
We're trying to cap fees at 3% for low balance accounts of $6,000 or below, under PYS. This measure alone will save around seven million Australians around $570 million in the first year alone, it's estimated. We're also banning exit fees, removing the disincentive to account consolidation. This measure will save low-income earners, working mothers, students as well as causal and part-time employees from erosion of fees.
Currently, the system requires default insurance leading to members paying for cover they're not aware of or is not appropriate to their circumstance. Part of PYS will make insurance an opt-in choice for people under 25 years, those with low balances and to members with inactive accounts. Its estimate this will benefit about five million Australians, saving them $3 billion in insurance premiums.
There are a total of 24 million superannuation accounts, held by about 15 million people as of June 2016. About 40 per cent of these people had multiple accounts. Over half of all accounts were either inactive of had balances of $6,000 or less. About 25 per cent of all accounts were inactive. Inactive accounts without a contribution for 13 months or longer, will be returned to existing accounts, reuniting around four million people with lost superannuation.
The Government is increasing choice of funds for Australians and closing loopholes letting some employers reduce their Superannuation Guarantee contributions that people who salary sacrifice.
These measures are vital to ensure Australians keep more of the money they earn.
Alternatively, Labor attack people trying to get ahead with their Retiree Tax which will impact 900,000 Australians, their changes to negative gearing and increasing Capital Gains Tax. Labor are a risk to retirement incomes.