Super changes look good

SURPRISE superannuation changes announced in last week’s Federal Budget have been broadly welcomed as a positive effort to boost Australians’ retirement savings.

The biggest dollar impacts come from empowering the Australian Taxation Office to use technology to reunite three million people with $6 billion of lost super by 2020, and stopping default life insurance cover in some funds to potentially save $3 billion.

But there were more than half a dozen other super and retirement product changes including:

Banning exit fees for members who switch funds;

A 3 per cent cap on investment fees for low-balance accounts;

Increasing the maximum size of self-managed super funds from four to six members, and:

New rules for lifetime income stream products.

Actuaries Institute CEO Elayne Grace said while many Australians did not like governments tinkering with super rules, the new measures were a positive step.

“This steady approach will provide confidence,” she said.

Dixon Advisory head of advice Nerida Cole also praised the changes.

“There’s some good consumer protection measures in there and a couple of welltargeted new proposals,” she said.

Consumer group Choice said billions of dollars would flow back to consumers from the move to make life insurance in super opt-in for people aged under 25, those with balances below $6000.

“Making insurance in super opt-in rather than opt-out for people who are at greatest risk of being fleeced will make a huge difference to the retirement savings of millions of Australians,” Choice CEO Alan Kirkland said.

The Financial Services Council welcomed steps to stop erosion of savings but warned “the devil will be in the detail”.