Budget super reforms to go before Senate

13 November 2018
| By Hannah |
image
image
expand image

The Federal Senate will this week consider the controversial amendment to the Superannuation Industry (Supervision) Act 1993 first proposed by the then-Treasurer Scott Morrison in this year’s Budget, aimed to stop fees eating away low balance accounts.

The reforms, if passed, would see superannuation funds restricted in charging fees on low balance accounts and prevented from charging insurance premiums to members under 25 years, with balances under $6,000 or with inactive accounts without their permission.

Despite the industry backlash on the reforms, financial advisory firm Dixon Advisory believed that many Australians would benefit from the amendment passing.

“Currently, there are no protections in place for low balance superannuation funds, and they continue to be diminished by fees and insurance premiums. This not only helps young people but also women who have low balances from time out of the workforce and older Australians who have taken on casual or part-time work after retirement,” Dixon’s head of advice, Nerida Cole, said.

“As life expectancy grows, our ageing population means more Australians than ever are under pressure to achieve financial security in retirement – it’s one of the biggest challenges we now face as a nation.

“Without this change, it is harder for people to accumulate long-term savings and it can also act as a disincentive to saving.”

Many Australian worked part-time or casually and there were more than 10 million unintended multiple super accounts. Cole warned that multiple insurance policies held across accounts could erode each one by 10 per cent or more, “destroying any chance of retiring in comfort”.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

11 months ago
Kevin Gorman

Super director remuneration ...

11 months 1 week ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

11 months 1 week ago

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 Co...

1 day 4 hours ago

Demand from institutional investors was the main driver of growth in Australia’s responsible investment (RI) market in 2023, as the industry continued to gain momentum....

1 day 4 hours ago

In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges....

1 day 5 hours ago