Govt needs to extend TTR change timetable
The Federal Government has been warned that superannuation funds will need at least 12 months lead time to put in place changes to the transition-to-retirement income streams (TRIS) and new transfer balance cap.
The Association of Superannuation Funds of Australia (ASFA) has filed a submission with the Federal Treasury telling the Government that the two Budget measures pose a considerable challenge if they are to be implemented by the proposed 1 July, 2017 commencement date.
The superannuation industry needs, as a minimum, a 12-month lead time from the time that legislative requirements have been finalised to settle the administrative design, determine the information technology specifications, and build and test system changes," the submission said.
It said a shorter period "introduces significant risk and imposes additional, unnecessary cost".
"There are a number of extensive and complex regulatory reforms scheduled for commencement over the coming 12 months, including changes to SuperStream and fee and cost disclosure," the submission said.
"Accordingly, project resourcing capacity is extremely limited and there are finite windows for system releases."
It said funds had indicated there was little likelihood of their being able to meet the commencement date of 1 July 2017 with respect to the changes to TRIS and the transfer balance cap as currently drafted.
"With respect to the changes to TRIS, a number of funds have indicated that it will take them up to 18 to 24 months to build the new tax engine that will be required to implement this measure. The alternative — to close their existing products — would take at least nine months to complete."
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