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Treasury changes upset KiwiSaver transfers
The Federal Treasury has been warned that changes to regulations covering the release of excess non-concessional contributions could have the effect of damaging the spirit of the agreement with New Zealand allowing KiwiSaver transfers.
The warning has been issued by the Association of Superannuation Funds of Australia (ASFA) in response to regulations supporting the fairer taxation of non-concessional contributions reforms.
The response specifically points to Item 9 in the draft regulations which it says will have both an adverse and unnecessary impact on superannuation transfers and will remove the capacity of a temporary resident of Australia who has moved permanently to New Zealand from transferring their Australian superannuation account to a KiwiSaver Scheme.
The ASFA response said the organisation believed that the regulatory change would achieve little but would have the effect of increasing fund administration costs and make the KiwiSaver transfer system even more inefficient.
"Additionally, the change does not appear to be within the spirit of the agreement with New Zealand as it may prevent some New Zealand resident KiwiSaver account holders from transferring their Australian source superannuation savings to their KiwiSaver account," it said.
"In summary, neither the benefit of the proposed change nor the mischief being addressed has been explained," the response said. "Also consideration does not appear to have been given to the impact of this increase in red tape on Australian superannuation funds or to KiwiSaver funds and members seeking the transfer of their Australian retirement benefits to a KiwiSaver account."
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