The long heralded choice of funds in superannuation is close to being signed off by the Democ-rats and Government according to the assistant treasurer Rod Kemp.
The long heralded choice of funds in superannuation is close to being signed off by the Democ-rats and Government according to the assistant treasurer Rod Kemp.
Speaking at an Australian Superannuation Funds Association (ASFA) lunch yesterday Kemp said he was not in a position to outline the details of the discussions but felt they were close to reaching a conclusion.
“This government went to two elections promising choice of funds and there have been long ne-gotiations but the discussions have been productive and examined every aspect of choice,” Kemp says.
The move to choice has been well received by industry, employers and employees according to Kemp but the Government wanted to ensure people were in a position to make educated choices about superannuation.
“Superannuation is about the employees and we will have a program to deliver employees an educated choice,” Kemp says.
“Choice of fund is the next major reform in this sector so these considerations are important.”
Other issues which have also been flagged by the Government, according to Kemp, include the prospect of default fund choice where no active choice has been made, the simplification of su-per funds and eliminating churning.
These were all covered in the discussions says Kemp but the focus was also beyond the introduc-tion of choice with portability of superannuation and access to superannuation funds before re-tirement arising as separate issues.
Changes to preservation arrangements have already been passed allowing access to super funds in time of illness or hardship but Kemp says the Government was not prepared to go further.
“These changes were agreed on by all parties and we feel they work well but the ongoing phi-losophy is that superannuation is a retirement income system,” Kemp says.
A review of these areas was possible according to Kemp with the Treasurer, Peter Costello, indi-cating his interest but only after the new tax system was bedded down.
He also restated the Government’s commitment to superannuation saying it was truly an integral part as over 90 per cent of the working population was covered by some form of superannuation.
He forecast that by June 2005 superannuation assets would be around the $700 billion mark and by June 2010 would be worth more than $1 trillion.
