Superfund members will benefit from the Federal Government tax relief that enables superfunds to merge without triggering adverse tax consequences that would hit members' savings, according to estimates released by the Government.

 

The Government will implement changes to the income tax law to support the implementation of its MySuper reforms by encouraging fund mergers that lower fees and costs for members.

 

"The Gillard Government is reforming superannuation so that fees and costs are lower.  The tax relief announced today removes a barrier that would have prevented otherwise sound superfund mergers from proceeding," the Minister for Financial Services and Superannuation Bill Shorten said.

 

Estimates undertaken by superfund AGEST about the impact of their proposed merger with Australian Super, show a 38 year old female worker earning around $44,000 will have $14,000 more in retirement savings thanks to the efficiency gains from the proposed merger.

 

Given the potential benefits to members of industry consolidation and the possible costs for some entities transitioning to MySuper, the Government will provide:

 

  • from 1 June 2012 to 1 July 2017, optional loss relief for mergers of complying superannuation funds on the same terms and conditions as the former temporary loss relief with some exceptions including an optional roll-over for capital gains and appropriate integrity provisions (see Attachment); and 
  • from 1 July 2013 to 1 July 2017, an optional roll-over and loss relief for capital gains and capital losses on mandatory transfers of default members' benefits and relevant assets to a MySuper product in another complying superannuation fund.
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Self-managed superannuation funds will be excluded from the relief because the MySuper requirements do not apply to them.