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Committee reports on portability of superannuation.

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Committee Reports on Portability of Superannuation

The Senate Select Committee on Superannuation today tabled its report on Portability of Superannuation. This is the last report of the Committee prior to its wind-up.

The Report is formally titled the Draft Superannuation Industry (Supervision) Amendment Regulations 2003 and draft Retirement Savings Accounts Amendment Regulations 2003.

Chair of the Committee, Senator John Watson (Liberal, Tasmania), indicated that the Committee broadly supported the principle of portability of superannuation, and the ability of individuals to consolidate their separate superannuation accounts. However, the Committee found that the portability regulations should be revised prior to 1 July 2004, when they are due to commence, to prevent portability out of an active account - an account receiving mandated Superannuation Guarantee contributions from an employer.

Senator Watson said: ‘While the Committee supported the principle of portability, the most significant concern coming out of the Committee’s inquiry was that portability should not apply to an active account. Providing portability out of an active account would be tantamount to providing choice of superannuation. In addition, there is concern that portability out of an active account, without a targeted education campaign and a strong disclosure environment, could lead to a further proliferation of superannuation accounts, and also raise other issues associated with choice of fund without proper legislative backing.’

The Committee’s report also includes a number of recommendations aimed at promoting portability of superannuation in Australia, including:

• Revising the financial disclosure requirements under the regulations; • The development of a roll over/transfer protocol to help facilitate portability; • The provision of legal protection to trustees under the regulations, and • The commencement of an education campaign on portability and choice of

superannuation when the regulations come into effect, using the $28.7 million allocated by the Government over four years in the 2002-03 Budget.

For further details, contact:

For comment: Senator John Watson, Chair 03 6331 4544 (Launceston,Tasmania)

For information: Stephen Frappell, Acting Secretary 02 6277 3533

10 September 2003