Tremendous sector unites on post-retirement | Australian Markets
Superannuation funds and the main superannuation foyer teams are presenting a united entrance to the Authorities for regulatory adjustments to permit contributions to be constituted of pension accounts.
Business funds akin to Relaxation have used their pre-Funds submissions to Treasury to back the regulatory adjustments and each the Tremendous Members Council (SMC) and the Affiliation of Superannuation Funds of Australia (ASFA) have made an identical calls.
The transfer is being interpreted by some as a means of superannuation funds extending their engagement with members past retirement.
The SMC, representing the main industry funds, described the present regulatory regime as out of date, whereas ASFA has urged as many as 700,000 people “might benefit from there being only one superannuation account for life”.
“There currently are nearly 700,000 Australians aged 65 and over who hold accumulation superannuation accounts and who have employer or personal contributions made to their accounts,” ASFA mentioned. “Such individuals automatically qualify to open a retirement income account but they need to maintain an accumulation account as well for contributions to be made.”
“Some individuals will retire and move their savings into pension phase but then return to work. Also, there are individuals aged under 65 who have a pension account after establishing a condition of release but who subsequently have contributions being made in regard to them,” it mentioned.
“The overall cost and complexity for individuals of superannuation arrangements would be reduced by allowing individuals to have just one superannuation account for life (subject of course to individuals being able to exercise choice of fund). This would include allowing individuals to make contributions directly into a pension phase superannuation product,” it mentioned.
“Such a change would be much simpler for members compared to the current requirement for a member to close a pension account and then start a new account if they want to top up their pension account,” ASFA mentioned.
SMC’s submission additionally famous that a important proportion of retirement are compelled to have two tremendous accounts – one to simply accept contributions and one to attract an income.
“Making this change would remove duplicate fees for about 100,000 retirees, slashing red tape and save retirees time and hassle,” it mentioned.
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