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» Articles - New Superannuation landscape for 2007
SUPERANNUATION is something we now contribute to every day of our working lives.
Five months ago the Federal Government introduced a raft of changes to super legislation with the aim of improving retirement savings and encouraging Australians to work and save. Treasurer Peter Costello set out to encourage people to put more money into superannuation to prepare for what is in a rapidly ageing society.
In September, Mr Costello interpreted the Australian Prudential Regulation Authority’s Quarterly Superannuation Performance report as justifying the legislation changes.
“The largest ever reform to superannuation has led to increased confidence in the system and increased contributions,” he said. “For the first time, member contributions were greater than employer contributions.”
The performance report showed Australia’s total superannuation assets at $1.15 trillion, a 25 per cent increase in the 12 months to June, including $22.4 billion in member contributions for the June quarter. This was three times higher than member contributions for the same quarter in 2006. Employer contributions stood at $18.9 billion for the quarter. Mr Costello viewed these figures as a sign of the reform’s success.
“The continuing growth in superannuation assets confirms that the Government’s Better Super reforms are being well accepted by the community.”
There were concerns from the financial planners and accountants about the transition to the new laws and their impact on the clients? SuperInvestor member John Agostinelli, of the Chartered Accounting firm Agostinelli Perlen, welcomed the reform to super laws.
“The changes for us have been very good in that they have opened up opportunities for clients,” he said. "Superannuation has become our clients’ primary focus in terms of retirement funding and tax planning.”
But some of our other members have not been so lucky. Christopher Falkingham from Balance Corporation, Chartered Accountants found the transition for members and financial planners difficult.
“Accountants at times were not able to able to obtain the latest regulations and the forms required to complete the returns. And whilst the Financial Planners were pushing clients to make the investment decisions, the accountants were not able to prepare the latest statements to provide them with the information.”
With the Government enacting such broad reform it would not have been surprising if there had been a lag between the announcement and the financial planners having to deal with the changes. But Mr Agostinelli said his firm had not found that to be the case.
“To be frank we have not encountered any delays or difficulties,” he said. “The changes have been dramatic and have taken time to communicate and implement for clients but that is really a product of our workflow more than anything at the legislative end.”
Westpac chief executive officer David Morgan, in launching BT Super for Life recently, quoted a figure of $9 billion in lost super and voiced his concerns about Australians’ laid-back attitude to managing their savings for retirement. The question now will be how the next government can help Australians gather together this lost money and to give them a grasp on how much they will really need for retirement as financiers embrace the new opportunities their clients have been offered this year.
Eliza Adamthwaite
www.SuperInvestor.com.au
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