AMP Limited has acknowledged a multi-million impact resulting from passage of the Government’s new superannuation legislation.
AMP has notified the Australian Securities Exchange (ASX) that it had completed an assessment of the legislation and the indicative operating earnings impact on AMP’s retained businesses this financial year was expected to be around $10 million after tax, with an annualised impact of $30 million after tax from 2020.
The company said these estimates were prior to a number of potential mitigants including offsetting actions to retain customers and revenue, administrative cost efficiencies and the consolidation of low balance superannuation accounts from other industry participants into AMP active accounts.
It said the earnings impact would predominantly be in the Australian wealth management business, which would be required under the legislation to transfer approximately 370,000 low balance superannuation accounts to the Australian Taxation Office (ATO).
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
Specific valuation decisions made by the $88 billion fund at the beginning of the pandemic were “not adequate for the deteriorating market conditions”, according to the prudential regulator.