FEAL members urged to make the most of budget changes

The budgetary changes to the superannuation system, expected to be introduced into parliament in December, offer lots of opportunities for super funds, the Fund Executives Association Ltd (FEAL) October briefing in Sydney was told last Friday.

Jennifer Brookhouse, the manager, technical services, for Zurich Financial Services, questioned whether the system had actually been made much simpler, as the Government claimed, but said it was certainly more attractive as a savings mechanism. It was now up to the industry to encourage people further to invest in super from an earlier age, she said. Even super splitting, which some commentators predicted as no longer being useful, was a good “hedge” against future governments taking back some of the new super concessions. Brookhouse said that many people remain sceptical about governments reducing the attractiveness of super, even though in fiscal terms the latest concessions were sustainable. Super splitting, between spouses, was also a good way to fund insurance premiums for a lower-paid spouse and a way to shift benefits between older or younger spouses to better suit the family needs. FEAL members remain concerned about the compulsory tax file number system being introduced from 2008. Brookhouse said there would be a government advertising campaign to alert people about providing tax file numbers and the Government had made a concession by delaying its introduction by a year. She said it was possible that there would be some further refinements before the changes became legislation, which might not be until next February. Super funds had to have their administrative systems for the changes in place by July, so they would not have much time after seeing the final legislation and guidelines. Guy McAliece, a partner of KPMG, which sponsored the FEAL briefings, said that it might be worthwhile if the first stage of the advertising campaign targeted employers rather than employees.