Speaking in Canberra at the Retirement Conference on Tuesday, Assistant Treasurer Stephen Jones said the government has proposed “that the Objective of Superannuation is to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way”.
“In coming months, we will release draft legislation for consultation before introducing it to Parliament soon after,” he said.
The SMSF sector has argued that the government must first clarify the Objective of Super before it introduces any other legislation including the proposed $3 million super tax proposal which is still under consultation.
Tracey Scotchbrook, head of policy and advocacy for the SMSFA said given the proximity of the announcements in February on the Objective of Super and the proposed $3 million super tax threshold, “we would expect to see exposure draft legislation for the $3 million super tax threshold to also be released shortly”.
“This is based on previous indications from government on when we are likely to see exposure draft legislation,” she said.
Mr Jones’s comments at the conference follow the government’s warning to super funds that they must improve customer experience and service and has signalled that this issue is a policy priority after a rise in complaints to AFCA.
He said that enshrining a purpose for the system will provide the government the ability to deal more harshly with funds who have repeat “underperformance” complaints on customer service.
“There is an opportunity for funds to be more innovative around what products they offer their members in the retirement phase,” he said.
“This is not something they need to wait for the government’s input on. This is something that they can and should be doing as they serve their members.”
He made broad strokes towards the government’s response to its QAR, commenting that the government expected funds to provide advice on their members’ retirement, indicating it will be difficult for them to meet their obligations under the covenant without offering forms of advice.
He concluded by announcing the Your Future Your Super performance test will be extended to choice products later this month.
“The extension of the performance test into the choice sector will scrutinise around 1000 additional products, representing over $350 billion in assets.”
“That the Objective of Superannuation is to preserve savings to deliver income for a dignified retirement” – So you as the government now decide for us what you consider is a dignified retirement. You also know how long we are going to live, the future costs of health care and what sort of level of care we all would like to have. You then wish to tax these amounts that you consider excessive unlike no other method in the system.