The Association of Superannuation Funds of Australia (ASFA) has welcomed the Government’s announcement to allow super funds to voluntarily transfer amounts to the tax office when the trustee believed it was in the member’s best interest.
ASFA said this flexibility would be beneficial in circumstances where:
The account was small and it was uneconomical for it to be maintained within a fund;
A person could not continue to be a member of the fund – for example a corporate super plan where a member has ceased employment with a sponsoring employer and has not provided payment instructions;
There were remediation amounts with respect to an exited member where the benefit must be preserved within the super system but the trustee is unable to contact the former member; and
A superannuation fund was being wound-up and a member had not provided directions as to where their benefit is to be rolled over.
ASFA chief executive, Dr Martin Fahy, said: “Having the ability to transfers amount to the Australian Taxation Office will improve flexibility for super fund trustees in the administration of their fund, lead to more people’s super being re-united with their active account and reduce the incidence of multiple accounts.
“There are a number of circumstances that can result in there being a small residual balance in a member’s superannuation account, including the COVID-19 early release scheme.
“Transferring such amounts to the ATO can be in the best interests of the members, especially where further contributions to that account are unlikely.”