The Australian Institute of Superannuation Trustees says that technological improvements make lost super less of an issue, and so the threshold at which lost super is transferred to the ATO should be reduced back to $2,000.
In their 2017/18 pre-Budget submission AIST recommends that the lost super threshold, which increased to $6,000 from the start of the year, be reduced back to $4,000 from 1 January 2018 and then to $2,000 in 2019.
“AIST notes and welcomes initiatives taken at the ATO to reduce red tape for small business and to increase the efficiency of the superannuation system,” says the pre-Budget submission.
“Major technological improvements such as SuperStream have revolutionised superannuation, reduced errors, improved non-payment problems and reduced the time out of the market previously suffered by superannuation members as their contributions waited to be connected with their accounts.”
“Further initiatives, such as Single Touch Payroll will see members better connected with their superannuation. Together, these improvement mean that lost superannuation will become less of an issue.”
“AIST takes this opportunity to point out that the policy need for such high thresholds for ‘small’ lost member accounts will be increasingly less relevant due to these initiatives.”
The AIST pre-Budget submission makes a number of other recommendations, including:
- an independent public-funded body to asses superannuation policy changes
- abolishing the $450 threshold for super guarantee
- doubling the rate of the LISTO for people earning less than the tax-free thresholds
- faster increases in the SG rate, so that it reaches 12% by July 2021
- removing restrictions around contributing to super based on age
- linking the Super Guarantee to gross remuneration instead of Ordinary Time Earnings