ASIC said today that it expects superannuation trustees to disclose the simpler superannuation changes to fund members within a timeframe that allows members to act on the changes.

ASIC expects trustees to implement good practices and disclose the simpler super changes, prescribed under The Tax Laws Amendment (Simplified Superannuation) Act 2007, so that fund members are in a position to use this information and determine whether they need to make any changes to their superannuation arrangements.

The super simplification measures represent one of the largest reforms to superannuation in recent years. ASIC naturally expects that superannuation trustees would like to tell their members about these reforms, given the effect that they can have on a member’s decisions about their superannuation.

The simpler super changes can potentially affect:

• when a member might wish to retire;
• whether a member might wish to make a large after-tax contribution this financial year when they can’t do the same next financial year;
• whether a member needs to change their salary sacrifice arrangements next financial year due to contribution caps;
• whether a member needs to provide their tax file number before they leave a super fund to avoid extra taxation of that benefit; and
• whether, on death, a pension benefit can be paid to an adult child.

ASIC expects that product disclosure statements provided to new members disclose information that demonstrates some consideration of these, and potentially other, super simplification issues. For existing members, ASIC expects that funds will undertake ‘significant event’ reporting if they have not already disclosed issues on simpler super, or be able to demonstrate clearly why they have decided not to tell members about these reforms in a timely manner.

Background

The Tax Laws Amendment (Simplified Superannuation) Act 2007 and related legislation passed through Parliament earlier this year. The changes will generally apply from 1 July 2007.

The reforms have been implemented to help streamline and make superannuation easier to understand, and to provide people with more choice regarding their superannuation arrangements.

Further information is available on the Australian Government’s simplified super site at www.simplersuper.treasury.gov.au, or by calling the Australian Taxation Office on 13 10 20.