ASFA, the Association of Superannuation Funds of Australia, has asked what is achieved by proposed regulations which will require super funds to pass through contributions data submitted by employers.
“The release of the draft regulations is the first public indication that the government is giving serious consideration to regulating such a requirement,” said ASFA.
The draft amendment will require that if a superannuation fund offers a MySuper product then that superannuation fund is required to pass on contributions data it receives from any of its default employers relating to any other superannuation funds.
ASFA is concerned “about the manner in which the policy around this measure has developed,” noting that pass through of contributions data has “never been formally announced as government policy” and wasn’t included in the list of announced by unlegislated superannuation and tax changes.
“ASFA is strongly opposed to the ATO’s proposal that all funds must provide a contribution data pass through service to their default employers.”
ASFA says that a reason for the mandatory pass through of contributions data has “not been clearly established.”
“What is achieved by forcing all funds to pass through the data, but not the money, that the data standards themselves do not achieve?,” asks ASFA.
According to ASFA these new regulations are unnecessary, given:
- “The data standards themselves solved the fundamental problem of employers having to use multiple methods when paying employees’ superannuation contributions”
- Small employers can use the ATO-run Superannuation Clearing House
- Other clearing services are available
- Payroll companies are increasingly offering contributions clearing services
ASFA also find technical faults in the drafting of the regulations and the explanatory statement, recommending that the “explanatory statement be reviewed and revised to ensure that the wording accurately reflects the scope of the proposed regulation.”
ASFA recommends that:
The Government reconsider the need to regulate the passing through of contributions data by default funds to chosen funds.
ASFA also says that any decision on contributions pass through regulations should be deferred until 30 June 2016, “by which time any deficiencies in market provided solutions for employers will be apparent”.
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