Attachment 2: Retirement income policy and legislative chronology

Contents

  

Milestones

Details

Source Documents

1900

New South Wales introduced a means tested age pension of £26 a year, funded out of general revenue.

Victoria (1900) and Queensland (1908) followed suit.

Old-age Pensions Act 1900 (NSW)

Claims for Old-age Pensions Act 1900 (Vic)

Old-Age Pensions Act 1908 (Qld)

1901

The Constitution gave the Commonwealth explicit power to legislate for provision of old age and invalid pensions.

S. 51(xxiii) Commonwealth of Australia Constitution Act 1901

10 June 1908

Invalid and Old Age Pensions Act 1908 passed by the Deakin Government. Rate of £26 per year (10/- a week). Eligibility was limited according to character, race, age, residency and means.  Paid to eligible men and women at age 65 years. Commenced 15 April 1909. It included the reduction in the eligibility age for women to 60 years by proclamation of the Governor-General.

Invalid and Old-age Pensions Act 1908

1912

1908 Act amended to completely remove the family home from the means test.

Invalid and Old-age Pensions Act 1912

1915

Income Tax Assessment Act 1915 provided for tax deductibility of employer contributions made on behalf of employees and for the exemption of superannuation fund earnings from taxation.

Income Tax Assessment Act 1915

1923

Bruce Government established a Royal Commission to examine the possibility of having a comprehensive national insurance scheme for retirement, sickness or disability.

Royal Commission on National Insurance (7 Sept 1923-5 Oct 1927).

1928

National Insurance Bill 1928 introduced. It lapsed in 1929 when the Government was defeated.

Second reading speech: National Insurance Bill 1928

1938

National Health and Pensions Insurance Act 1938 was enacted, but its introduction was delayed, and then abandoned, because of World War 2.

Second reading speech: National Health and Pensions Insurance Bill 1938

1945

Chifley Government introduced an additional levy on personal income tax which, along with a payroll tax from employers, was credited to the National Welfare Fund. There was, however, no direct link between contributions and benefits and the pension. The National Welfare Fund, whilst set up as a means of establishing a base from which a national superannuation fund could be operated, was in practice merely an accounting device until its abolition in 1985.

National Welfare Fund Act 1945

1946

Constitutional amendments passed to extend the Commonwealth’s powers in the areas of social security and health, including widows’ pensions.

Constitution Alteration (Social Services) 1946

1951–1953

Commonwealth Committee on Taxation (Spooner Committee) undertook a number of inquiries on request of the Treasurer on income tax and other taxation laws. The Committee issued a series of reports, including several that examined the taxation treatment applied to superannuation including preservation (reference no. 2); concessional allowances on contributions (references 9 and 22); and taxation of retirement payments (reference 13).

Commonwealth Committee on Taxation, Parliamentary Papers 214-223/1951–53.

12 June 1961

Superannuation funds exempt from tax if they held required amounts of Commonwealth Bonds (‘30/20 rule’). Commonwealth control of superannuation funds by use of taxation power firmly established.

Income Tax and Social Services Contribution Assessment Act 1961

17 August 1961

Commonwealth Committee on Taxation (Ligertwood Committee) report tabled. Key superannuation recommendations included:

  • self-employed persons who are members of a superannuation fund to be allowed a limited business deduction for contributions to a fund
  • consolidation of tax arrangements for employer contributions to remove complexity and anomalies
  • continuation of tax-exempt status on the income of superannuation funds but strengthening of tests to guide the Commissioner of Taxation on granting exemptions.

Report of the Commonwealth Committee on Taxation, June 1961.

Commonwealth Committee on Taxation: Statement by the Treasurer

1965

High Court upheld Commonwealth’s ability to control superannuation fund investment by use of taxation power.

Fairfax v Commissioner of Taxation (1965) 114 CLR 1

13 November 1972

As leader of the Opposition, Gough Whitlam outlines 1972 election policies including raising the Age Pension to 25 per cent of average weekly male earnings, abolishing the Age Pension means test and establishing national superannuation arrangements after a ‘thorough inquiry into overseas examples and Australian proposals for such a scheme’.

Its time for leadership, policy speech

March 1973

Whitlam Labor Government established the National Superannuation Committee of Inquiry under the chairmanship of Keith Hancock.

Statement to House of Representatives by the Prime Minister.

September 1973

Means test for pensioners 75 years of age, and over, abolished.

Social Services Act (No 4) 1973

1974

Interim report of the Hancock Committee of inquiry released. It is essentially a discussion paper outlining the history of superannuation in Australia to date and policy options.

Interim report of the National Superannuation Committee of Inquiry, June 1974.

31 January 1975

Final report of Taxation Review Committee (Asprey Committee) completed. Review included consideration of the tax treatment of superannuation contributions, income and benefits. Review put forward two alternate ‘views’ on taxation arrangements supporting the status quo or fundamental changes applying to new schemes only. The Committee was critical of the relatively low tax rate of 5 per cent applied to lump sum benefits that had been in place since 1915.

Taxation Review Committee Full Report, January 1975.

May 1975

Means test removed for persons aged 70 to 74 inclusive.

Social Services Act 1975

1975

Age Pension increased sufficiently to meet Government’s objective of 25 per cent of average weekly earnings.

Social Services Act (No 3) 1975

1976

Pensions became subject to automatic increases twice yearly.

Age Pension assets test abolished.

Social Services Amendment Act (No 3) 1976

1976

The Hancock Inquiry recommended a partially contributory, universal pension system with an earnings-related supplement. A minority recommendation suggested a non-contributory flat rate universal pension, a means tested supplement, and encouragement of voluntary savings through expanding occupational superannuation.

National Superannuation Committee of Inquiry.  Final Report. Part 1, April 1976 and Part 2, March 1977.

20 June 1977

Fraser government decided not to establish a contributory national superannuation scheme.

Cabinet Decision 3435 of 20 July 1977 in response to Cabinet Submission No. 1394 of 1977.

1978

Pension increases to be adjusted only once a year (in November). Future increases in the Age Pension for those aged 70 or over was made subject to an income test.

Social Services Amendment Act 1978

12 July 1979

Fraser Government rejected the recommendations of the Hancock Inquiry. It announced the establishment of a task force to consider the role of occupational superannuation in providing for retirement and whether there was a need to revise or impose new standards for schemes.

Media release

6 September 1979

Fraser Government indicated its concern that superannuation arrangements not be used for purposes other than genuine retirement such as the cash payment of an employers’ contributions to an employee who chose to change employment after a relatively short period of service. This statement came as the task force on superannuation continued its work.

Media release

1979

Pensions subject to twice yearly increases, in May and November.

Social Services Amendment Act 1979

November 1981

Report of the Committee of Inquiry into the Australian Financial System (Campbell Inquiry) released. The Committee concluded that existing taxation advantages for superannuation were inequitable when compared with other savings vehicles and suggested means of removing these inequities. Recommendations included:

  • income (investment income and employer contributions) should be taxed in the superannuation plan at an average marginal rate applicable to contributors
  • that the 30/20 rule regarding investment in public sector entities should be abolished
  • all contributions, both member and employer, should be tax deductible
  • all benefits, whether in pension or lump sum form, should be free of income tax.

Australian financial system: final report of the Committee of Inquiry

30 July 1982

Fraser Government announced that it had no plans to neither change the taxation treatment of lump sum superannuation benefits nor set a limit on the level of superannuation benefit that may be paid in the form of a lump sum.

Media release

1983

The Statement of Accord (Prices and Incomes Accord) between the ALP and the ACTU was endorsed in February, shortly before the federal election. Claims for wage increases were to be restricted to movements in the CPI.

Statement of Accord

May 1983

Base pension for those aged 70 and over became subject to an income test.

Social Security and Repatriation Legislation Amendment Act 1983

19 May 1983

Hawke Labor Government expressed support for the principles of employee superannuation. Changes to tax treatment of superannuation lump sums proposed, with certain lump sum payments, which were exempt from tax entirely or subject to tax on 5 per cent of the amounts received, to be generally subject to a 30 per cent tax unless converted into a pension or annuity or rolled over into another superannuation fund within a short time. Other announcements included making it more attractive for life offices and superannuation funds to sell annuities and to review arrangements under which the return of capital component of an annuity was taken into account in the age pension income test.

Economy: Ministerial statement by the Treasurer

26 May 1983

Hawke Government tabled the final report of the Commonwealth Task Force on Occupational Superannuation, commissioned by the former government on 12 July 1979. The main proposals in the report included:

  • eligibility for tax concessions for superannuation funds to depend on the vesting and preservation of retirement benefits in accordance with minimum prescribed standards
  • a requirement for the regular disclosure of certain information to members of superannuation funds
  • the removal of certain constraints to facilitate the achievement of a limited market for annuities among certain groups such as those using annuities for pre-retirement purposes and some age pensioners aged 70 years or over.

Final report of the Commonwealth task force on occupational superannuation, January 1983.

30 May 1983

Hawke Government clarified changes to taxation arrangements to apply to superannuation lump sums as announced on 19 May 1983, including that the change-over date for tax arrangements affecting lump sums would be 30 June 1983, not 19 May as previously indicated.

Media release

1 July 1983

Changes to superannuation tax arrangements announced on 19 May 1983 take effect.

Income Tax Assessment Amendment Act (No. 3) 1984

7 August 1983

Hawke Government further clarified changes to taxation to apply to lump sums announced on 19 May 1983. Changes include removing the 46 and 60 per cent rates progressive rates that were proposed to apply and instead apply a flat 30 per cent and that lump sums received at age 55 or later the first $50,000 would be taxed at 15 per cent.

Media release

1984

Age pension assets test reintroduced. The family home was excluded.

Social Security and Repatriation (Budget Measures and Assets Test) Act 1984

11 September 1984

Abolition of the ‘30/20’ rule for investments in government bonds for life companies and superannuation funds.

Taxation Laws Amendment Act 1985

4 September 1985

Renegotiation of the Accord identified superannuation as a key issue. Key areas of agreement included:

  • superannuation should be extended and improved on an industry by industry, occupation by occupation or, in limited circumstances, company by company basis.
  • the improvement should be offset against national productivity and be based on a three per cent wage equivalent.
  • negotiations can proceed on superannuation on the above basis provided that the cost impact of new or improved arrangements except in very isolated circumstances will not occur before 1 July 1986.
  • before the expiration of the current parliament the Government would legislate to establish a national safety net superannuation scheme to which employers will be required to contribute where they have failed to provide cover for their employees under an appropriate scheme.

Media release

1986

Labor joined with the ACTU in seeking a universal 3 per cent superannuation contribution by employers to be paid into an industry fund, in lieu of a wage rise.

 

1986

Accord Mark II between the Government and the unions stipulated that compensation to employees should be 6 per cent (to keep pace with inflation). This was to be 3 per cent employer superannuation contribution, a 2 per cent wage rise, and tax cuts.

Agreement endorsed by the Conciliation and Arbitration Commission February 1986.

 

1986

Employer groups, including the Confederation of Australian Industry, challenged the Commission’s decision in the High Court, claiming that superannuation was not an industrial matter within section 51 (xxxv) of the Constitution.

 

15 May 1986

High Court ruled in favour of the Conciliation and Arbitration Commission.

‘Superannuation Case’, (1986) 160 CLR 341

June 1986

National Wage Case established guidelines to require new industry superannuation schemes to conform to Commonwealth operational standards.

National Wage Case 1986 – Reason for Decision

1987

Insurance and Superannuation Commission (ISC) was established as an industry regulator.

Insurance and Superannuation Commissioner Act 1987

21 December 1987

Hawke Government introduced the Occupational Superannuation Standards Act 1987 (OSSA).

Operating standards were prescribed for the vesting of benefits from employer and employee contribution; preservation of benefits until age 55; more member involvement in the control of superannuation funds; and security of members’ benefits.

Occupational Superannuation Standards Act 1987

25 May 1988

Hawke Government statement Reform of the Taxation of Superannuation contained measures to bring forward payment of superannuation taxation liabilities by introducing a tax on contributions and reducing tax on benefits. Included proposal for two major changes to reasonable benefits limit (RBL) arrangements:

  • that the RBL based on a single multiple would be replaced by RBL based upon a tapered scale so that a person’s RBL tapers off as salary increases.
  • that, with minor exceptions, all benefits which derive from concessionally taxed sources or which are concessionally taxed themselves would be subject to the RBL, regardless of whether they were provided by public or private sector sources.

Benefits previously subject to the RBL would be subject to the new rules from 1 July 1988 while public sector benefits and ‘golden handshakes’ would become subject to the RBL from 1 July 1990.

Reform of the Taxation of Superannuation

1 July 1988

Reasonable benefit limits changes announced on 25 May 1988 take effect.

Insurance and Superannuation Commission, Revised information circular no. 7, June 1988.

August 1989

Hawke Government’s 1989 retirement income policy statement established a policy in Australia based on the ‘twin pillars’ of the Age Pension and private superannuation, specifically rejecting the option of a National Superannuation Scheme.

Better incomes: Retirement income policy into the next century

25 July 1991

The Hon. Paul Keating MP, sitting as a backbencher, provided an outline of his proposed retirement income system (‘National Retirement Income Scheme’) to be based on the Age Pension augmented by a privately funded and employment related national superannuation scheme.

A retirement incomes policy

20 August 1991

In the Budget, Treasurer John Kerin announced that from 1 July 1992, under a new system to be known as the Superannuation Guarantee (SG), employers would be required to make superannuation contributions on behalf of their employees.

Budget speech

2 April 1992

Keating Government introduced Superannuation Guarantee (Administration) Bill 1992 which provided the basis for the proposed Superannuation Guarantee.

Second reading speech: Superannuation Guarantee (Administration) Bill 1992 and the Superannuation Guarantee Charge Bill 1992

June 1992

Senate Select Committee on Superannuation presented its first report. This Senate Committee, in various forms, reviewed and issued reports on various superannuation issues up to the end of the 40th Parliament (2004). Many of these reports led to significant changes in the superannuation system.

Safeguarding super: the regulation of superannuation (PP 182/92)

1 July 1992

Superannuation guarantee charge was 3 per cent for employers with a base year payroll of $1 million or less and 4 per cent where the employer’s base year payroll was above $1 million.

Superannuation Guarantee (Administration) Act 1992

1993

Keating Government overhauled regulation of superannuation with the introduction of the Superannuation Industry (Supervision) Act 1993 (SIS Act). The OSSA continued in force but many of its provisions were repealed and transferred to the SIS Act.

Superannuation Industry (Supervision) Act 1993

1993

World Bank endorsed Australia’s three pillar system for the provision of retirement income as world’s best practice.

Averting the Old Age Crisis

1 January 1993

Superannuation guarantee charge was 3 per cent for employers with a base year payroll of $1 million or less, and 5 per cent where the employer’s base year payroll was above $1 million.

Superannuation Guarantee (Administration) Act 1992

June 1993

The FitzGerald report advocated increasing household savings via superannuation but recommended that national savings be increased by increasing public sector savings. Superannuation’s role in increasing national savings was no longer seen as important. This was a significant change in the policy rationale for the superannuation system.

National saving: A report to the Treasurer

1994

Pension age for eligible women would be raised to 65 years, in a phased process between 1994 and 2014.

Social Security Legislation Amendment Act (No.2) 1994

9 May 1995

In the 1995 budget speech, Treasurer Ralph Willis outlined plans to pay previously-announced tax cuts into employee’s superannuation funds. Government was to make matching contributions. The principal of matching government superannuation co-contributions was established.

Budget Speech and accompanying statement – Saving for our future.

1 July 1994

Superannuation Complaints Tribunal was established to deal with complaints about superannuation, specifically in the areas of regulated superannuation funds, annuities and deferred annuities.

Superannuation (Resolution of Complaints) Act 1993

1 July 1994

Superannuation guarantee charge was 4 per cent for employers with a base year payroll of $1 million or less, and 5 per cent where the employer’s base year payroll was above $1 million.

 

2 November 1995

Shadow Treasurer Peter Costello called for employee choice and for funds to ‘compete for business’ in an address to the Association of Superannuation Funds of Australia.

Federal Coalition’s approach to superannuation

1 July 1995

Superannuation guarantee charge was 5 per cent for employers with a base year payroll of $1 million or less, and 6 per cent where the employer’s base year payroll was above $1 million.

 

February 1996

Coalition’s 1996 election policies included:

  • maintaining the Age Pension benchmark of 25 per cent of average weekly earnings continuing the current system of twice yearly indexation in accordance with the CPI
  • allowing people of pension age to defer taking up their pension entitlement for up to five years in return for receiving an increased pension at a later date
  • implementing the phased increase to the preservation age as announced by the Government in 1992
  • giving employees greater freedom to choose the fund into which their superannuation contributions will be paid
  • allowing financial institutions to offer ‘retirement savings accounts’ as an alternative to superannuation funds
  • maintaining the timetabled increase in the superannuation guarantee to 9 per cent by July 2002, and
  • using allocated funds in the 1995–96 Budget to match compulsory employee contributions in full ‘in a manner that is both efficient and equitable’.

A Social Security Safety Net, The Liberal and National Parties' Social Security Policy (22 February 1996

Super for all: Security and flexibility in retirement, The Federal Coalition’s superannuation and retirement incomes policy (19 February 1996)

1 July 1996

Superannuation guarantee charge was 6 per cent of an employer’s base year payroll for all employers.

 

20 August 1996

Superannuation surcharge for higher income earners was announced by Treasurer Peter Costello in the Howard Government’s first budget. Other superannuation-related budget announcements included:

  • increasing the general age limit for superannuation contributions from 65 to 70 years
  • allowing banks, building societies, credit unions and life insurance companies to provide superannuation in the form of Retirement Savings Accounts
  • offering an income tax rebate for people who contributed to the superannuation fund or Retirement Savings Account of a non-working or low income spouse; and
  • allowing employees who earned between $450 and $900 per month to have the option of choosing between Superannuation guarantee contributions or the equivalent in wages and salary.

The Treasurer also announced that the former Government’s 1995-96 Budget proposals for employee and government contributions would be reviewed and that the schedule of employer Superannuation guarantee contributions would remain unchanged. The Coalition Government proposed that employees should be able to ‘opt out’ by having the opportunity to receive wages or salary instead of Superannuation guarantee contributions.

Budget speech

March 1997

Final report of the Financial System Inquiry, established by Treasurer Costello in May 1996, advocated superannuation choice and other changes to the superannuation system.

Financial System Inquiry, Final report (Wallis report).

13 May 1997

1997-98 Budget announcements included the establishment of a broad-based savings tax rebate, preservation of all benefits from 1 July 1999, increasing the superannuation preservation from 55 to 60 years on a phased-in basis and a ‘Deferred Pension Bonus Plan’ which offered a financial incentive to defer retirement.

Joint statement by the Treasurer and Minister for Social Security, Savings: choice and incentive

1 July 1997

Maximum age for superannuation guarantee contributions was increased from 65 to 70 years.

Taxation Laws Amendment Act (No. 3)1997

1 July 1997

Retirement Savings Accounts (RSAs) were introduced. RSAs were intended to provide a simple, low-cost and low-risk savings product which employers could use as an alternative to making contributions to superannuation funds for their superannuation contributions for employees. Individuals could also use RSAs for their personal superannuation contributions.

Retirement Savings Account Act 1997

20 September 1997

Age Pension was to be formally maintained at minimum of 25 per cent of AWOTE.

Social Security and Veterans’ Affairs Legislation Amendment (Male Total Average Weekly Earnings Benchmark) Act 1997

1 July 1997

Limited access to superannuation prior to preservation age became possible on compassionate grounds.

Superannuation Industry (Supervision) Regulations (Amendment) 1997

9 December 1997

Limited access to superannuation prior to preservation age became possible if the member was in severe financial hardship. This was defined as being in receipt of Commonwealth income support for a continuous period of 26 weeks or a cumulative period of 39 weeks.

Superannuation Industry (Supervision) Regulations (Amendment) 1997

1998

Age Pension means test for retirement income streams was revised. Pension Bonus scheme was introduced. A person could accrue a pension bonus payment by deferring claiming the pension while still working.

Social Security and Veterans’ Affairs Legislation Amendment (Pension Bonus Scheme) Act 1998

1 July 1998

Australian Prudential Regulation Authority (APRA) was established as the lead superannuation regulator. The Australian Securities and Investments Commission also took a significant role in the regulation of superannuation. The Australian Taxation Office (ATO) continued to carry out some regulatory functions and administer the superannuation taxation legislation. The Insurance and Superannuation Commission ceased to operate on the same date. These changes were in response to the recommendations of the Wallis Inquiry.

Australian Prudential Regulation Authority Act 1998

1 July 1998

Superannuation guarantee charge was 7 per cent of employer’s base year payroll for all employers.

 

1 July 1999

Introduction of provisions for establishing a ‘binding’ death benefit nomination for superannuation fund trustees that are not self-managed superannuation funds.

Superannuation Legislation Amendment Act 1999

1 July 1999

A number of changes were made to preservation rules and there was a phased increase in preservation age from 55 years announced in 1997-98 Budget take effect according to the following:

  • born before 1 July 1960—55 years
  • born during the year 1 July 1960 to 30 June 1961—56 years
  • born during the year 1 July 1961 to 30 June 1962—57 years
  • born during the year 1 July 1962 to 30 June 1963—58 years
  • born during the year 1 July 1963 to 30 June 1964—59 years
  • born after 30 June 1964—60 years

Superannuation Industry (Supervision) Regulations (Amendment) 1998

30 July 1999

Reforms to business taxation, including proposals to reduce the capital gains tax (CGT) rate for super funds to 10 per cent.

Review of Business Taxation, Report July 1999, Final report, Chairman’s introduction

21 September 1999

A complying superannuation entity that acquired a CGT asset and made a capital gain from a CGT event happening to that CGT asset was able to receive a 33⅓ per cent discount on the capital gain, providing that the CGT asset was owned by the taxpayer for at least 12 months.

New Business Tax System (Integrity and Other Measures) Act 1999

8 October 1999

ATO took administrative responsibility for Self-Managed Superannuation Funds (SMSF).

Superannuation Legislation Amendment Act (No.3) 1999

1 July 2000

Superannuation guarantee charge was 8 per cent of employer’s base year payroll for all employers.

 

10 December 2001

Productivity Commission delivered its final report to the government for its inquiry into the Superannuation Industry (Supervision) Act 1993 and certain other superannuation legislation. Major recommendations included:

  • the need for funds regulated by the Australian Prudential Regulation Authority to prepare a risk management strategy
  • protection of lost member accounts with balances in excess of $1,000 should be removed
  • Part 23 of the Superannuation Industry (Supervision) Act 1993 should be amended to require the Minister to table in Parliament, as soon as practicable, the Australian Prudential Regulation Authority’s advice and the reasons for the Minister’s decision on whether to provide financial assistance to funds which suffer substantial loss from theft or fraud

Review of the Superannuation Industry (Supervision) Act 1993 and certain other superannuation legislation

March 2002

Financial Services Reform Act 2001was designed to be a single licensing and disclosure approach for all financial services, including superannuation.

Financial Services Reform Act 2001

1 July 2002

Maximum age for personal superannuation contributions increased from 70 to 75 years (for people working at least 10 hours a week).

Superannuation Industry (Supervision) Amendment Regulations 2002 (No. 3)

1 July 2002

Temporary residents who were permanently departing Australia could withdraw their accumulated superannuation benefits before their preservation age. This does not apply to New Zealand residents.

Superannuation Industry (Supervision) Amendment Regulations 2002 (No. 2)

1 July 2002

Superannuation guarantee charge was 9 per cent of employer’s base year payroll for all employers.

 

28 December 2002

Superannuation assets were able to be divided between the parties in a marriage breakdown.

Family Law Legislation Amendment (Superannuation) (Consequential Provisions) Act 2002

1 July 2003

Superannuation government co-contribution provided for a matching government contribution for eligible personal contributions for low income earners (those earning less than $27,500 with a reduction of $0.08 per dollar earned up to $40,000), with a maximum government contribution of $1,000.

Superannuation (Government co-contribution for Low Income Earners) Act 2003

1 July 2003

Requirement for employers to make quarterly superannuation guarantee payments was introduced.

Taxation Laws Amendment (Superannuation) Act (No. 2) 2002

1 July 2003

Superannuation surcharge was reduced from 15 per cent to 14.5 per cent.

Superannuation (Surcharge Rate Reduction) Amendment Act 2003

25 February 2004

Treasurer released A more flexible and adaptable retirement income system as part of ‘Australia’s Demographic Challenges’ announcement. Amongst other things this report proposed to allow access to a person’s superannuation, in the form of an income stream, before they had left the work force (that is, transition to retirement pensions) and to scrap the work test for those under age 65.

A more flexible and adaptable retirement income system

1 July 2004

Changes were made to the regulation of superannuation entities. All superannuation trustees of large eligible funds had to be licensed from 1 July 2004. Trustees of SMSFs did not have to be licensed.

Superannuation Safety Amendment Act 2004

3 June 2004

Superannuation regulations were changed to allow the portability of money between different superannuation accounts.

Superannuation Industry (Supervision) Amendment Regulations 2004 (No. 3)

1 July 2004

Tax free payment of superannuation benefits could be made to the surviving partner on an interdependent relationship. An interdependent relationship can encompass same-sex couples or a relationship where one person is financially dependent on another person. For example, were a son or daughter, is financially supporting a parent.

Superannuation Legislation Amendment (Choice of Superannuation Funds) Act 2004

1 July 2004

Work test governing contributions made under age 65 ceased to operate. Work test remained for contributions made above age 65.

Superannuation Industry (Supervision) Amendment Regulations 2004 (No. 4)

1 July 2004

Superannuation surcharge was reduced from 14.5 per cent to 12.5 per cent.

Superannuation Budget Measures Act 2004

1 July 2004

Superannuation government co-contribution matching rate increased from 100 per cent to 150 per cent up to a maximum contribution of $1,500. Eligibility income thresholds increased to $28,000 for full contribution with a reduction of $0.05 per dollar earned up to $58,000.

Superannuation (Government Co-contribution for Low Income Earners) Act 2003

10 May 2005

Treasurer Costello announced in the Budget the abolition of the superannuation surcharge. Changes made were intended to take effect from 1 July 2005.

Budget speech

1 July 2005

Transition to Retirement (Superannuation) pensions became available. A member could commence to receive a transition to retirement pension without having to leave the workforce or retire.

Superannuation Industry (Supervision) Amendment Regulations 2005 (No. 2)

1 July 2005

Choice of superannuation fund was implemented. This required employers to provide their employees with a choice of fund into which superannuation guarantee payments made for them could be paid. The choice of fund proposals were first announced in the 1997-98 Budget. In 1998, the Superannuation Legislation Amendment (Choice of Superannuation Funds) Bill 1998 was the first bill introduced to implement the measure, however the Bill lapsed with the election in 2001. The Superannuation Legislation Amendment (Choice of Superannuation Funds) Bill 2002 was then introduced in 2002 and this was subsequently renamed as a 2003 Bill. The 2003 Bill was amended in 2003 and 2004 before finally being passed by the Parliament.

Superannuation Legislation Amendment (Choice of Superannuation Funds) Act 2004

1 July 2005

Superannuation surcharge abolition took effect.

Superannuation Law Amendment (Abolition of Surcharge) Act 2005

1 Jan 2006

Contributions splitting took effect. A member’s superannuation guarantee and other contributions could be split with their spouse.

Superannuation Industry (Supervision) Amendment Regulations 2005 (No. 8)

9 May 2006

In the Budget, Treasurer Costello announced plans to simplify superannuation. ‘Simpler Super’ included:

  • exemption from tax on end benefits for Australians aged 60 years or over from 1 July 2007
  • no tax on a lump sum
  • no tax on a superannuation pension
  • reasonable benefit limits to be abolished
  • transferring super between funds made easier.

Implementation date was 1 July 2007.

Budget speech

Continuing tax reform: Ministerial statement by the Treasurer

1 July 2007

Most simplified superannuation amendments took effect. Bulk of operating superannuation tax law was now in the Income Tax Assessment Act 1997. Prudential and operational aspects were largely in the SIS Act. Residual parts of superannuation law remained in the Income Tax Assessment Act 1936.

Tax Laws Amendment (Simplified Superannuation) Act 2007

1 July 2007

Minister for Revenue and Assistant Treasurer announced that tax free benefits were able to be paid to those with a terminal illness.

Media release

Tax Laws Amendment (2008 Measures No. 1) Act 2008

31 December 2007

Employee’s ability to recover unpaid superannuation amounts from employers that have ceased operating was enhanced.

Corporations Amendment (Insolvency) Act 2007

16 February 2008

Superannuation fund members with a diagnosed terminal medical condition were able to access their accrued superannuation entitlements.

Superannuation Industry (Supervision) Amendment Regulations 2008 (No. 1)

3 March 2008

Minister for Superannuation and Corporate Law, Nick Sherry, announced the establishment of a Superannuation Advisory Group to advise on ‘matters relevant to current or prospective superannuation legislation and on Government policy proposals which have significant impact for the superannuation industry’.

Media release

5 May 2008

Minister Sherry announced consultation on a measure introduced by the Coalition Government which required future superannuation contributions and existing balances for temporary residents to be transferred to the ATO. If these were unclaimed after 5 years, the amounts would be confiscated. Extra revenue of up to $1 billion a year was predicted.

Media release

13 May 2008

Labor’s first Budget contained details of a review of taxation—‘Australia’s future tax system’, to be chaired by Treasury Secretary Dr Ken Henry. Terms of reference included the government’s commitment to preserve tax-free superannuation payments for the over 60s.

Superannuation budget initiatives included:

  • expanded definitions of income to include certain ‘salary sacrificed’ contributions to superannuation
  • access to tax free lump sums for persons with a terminal medical condition
  • payment of temporary residents’ superannuation to the Australian Government
  • establishment of a Superannuation Clearing House Facility
  • reduction in funding for choice of superannuation fund
  • not to proceed with Simplified Superannuation—advertising campaign.

Australia’s future tax system and terms of reference

 

Budget paper no. 2: 2008–09

19 May 2008

In a speech to the Institute of Actuaries Financial Services Forum Minister Sherry announced that universal forecasting of superannuation end-benefits could be introduced to enable better understanding of retirement savings.

The Government’s priorities in superannuation and financial services

28 May 2008

Attorney-General Robert McClelland introduced the first of a range of amendments to remove same-sex discrimination from acts governing Commonwealth superannuation schemes.  This ensured that same-sex couples were not denied the payment of death benefits from superannuation schemes or the tax concessions on death benefits that were made available to opposite-sex couples.

Same-Sex Relationships (Equal Treatment in Commonwealth Laws—Superannuation) Bill 2008

June 2008

ASIC began to provide advice on long term superannuation returns.

Media release

17 Jun 2008

The Same-Sex Relationships (Equal Treatment in Commonwealth Laws—Superannuation) Bill 2008 was sent to a committee inquiry without a reporting date.

Referral of Bills to Committee

24 June 2008

Legislation providing further relief for employers who made a late superannuation guarantee contribution received Royal Assent.

Media release

 

Tax Laws Amendment (2008 Measures No.2) Act 2008

26 June 2008

Minister Sherry announced a review of pension indexation arrangements for Australian Government civilian and military superannuation schemes. The review commenced in July 2008 and was expected to conclude by the end of 2008.

Media release

December 2008

Review of Australian government pension indexation (Matthews Review) was completed. However the Report was not released to the public until 21 August 2009.

Pension Indexation Review website

18 December 2008

Temporary residents’ superannuation benefits were required to be paid to the ATO, if not claimed within six months of departing Australia.

Media release 

Temporary Residents' Superannuation Legislation Amendment Act 2008

4 December 2008

Royal Assent to the Same-Sex Relationships (Equal Treatment in Commonwealth Laws—Superannuation) Act 2008

 

1 April 2009

Higher tax rate of temporary residents superannuation benefits were applied.

Media release 

Superannuation (Departing Australia Superannuation Payments Tax) Amendment Act 2008

28 April 2009

Minister Sherry announced a review into the governance, efficiency, structure and operation of Australia’s superannuation system.

Media release

4 May 2009

Release of the Report on strategic issues for the retirement income system—as part of the Australia’s future tax system inquiry (Henry Review). Amongst other things it recommended that the superannuation guarantee contribution rate remain at 9 per cent of ordinary time earnings and retained the $450 per month minimum wage threshold for superannuation guarantee purposes.

Report on strategic issues for the retirement income system

12 May 2009

2009–10 budget announcements included:

  • extension of capital loss roll-over for complying superannuation fund mergers
  • drawdown relief for retirees for 2008-09
  • further drawdown relief for retirees
  • amendments to the general unclaimed money regime and other amendments resulting from the temporary residents’ superannuation measure
  • reducing the concessional contributions cap to $25,000 (indexed) from 2009–10
  • payment of small and insoluble lost accounts to unclaimed monies
  • trans-Tasman retirement savings portability scheme.

Budget paper no. 2: 2009–10

29 May 2009

Minister Sherry announced the terms of reference and makeup of the review into the governance, efficiency, structure and operation of Australia’s superannuation system.

Media release

1 July 2009

Rate at which government superannuation co-contribution is paid was reduced temporarily between 1 July 2009 and 30 June 2014. The matching rate was to be 100 per cent for 2009-10, 2010-11 and 2011-12 (with a maximum of $1,000), 125 per cent for 2012-13 and 2013-14 (with a maximum of $1,250). Matching rate returns to $1.50 for every $1 contribution (subject to income test threshold) on 1 July 2014 (with a maximum of $1,500).

Tax Laws Amendment (2009 Budget Measures No 1) Act 2009

1 July 2009

Limit on concessional contributions (formally known as tax deductible contributions) reduced from $50,000 per annum to $25,000 per annum for 2009–10 and later years. This limit was indexed to changes in AWOTE (if those changes were sufficiently large enough). Transitional measures remained in place for those over 50 years of age to 2011–2012. Annual limits on non-concessional contributions (that is, after tax contributions) are six times the limit on concessional contributions for those under 50 years of age (that is, six times $25,000 or $150,000 per annum for the 2009–10 year).

Tax Laws Amendment (2009 Budget Measures No 1) Act 2009

1 July 2009

Income for government superannuation co-contribution purposes to include a person’s reportable employer superannuation contributions. That is, the amount that the employer puts into superannuation on the employee’s behalf that exceeds the superannuation guarantee requirements.

Tax Laws Amendment (2009 Measures No 1) Act 2009

1 July 2009

Expanded definition of ‘ordinary time earnings’ for superannuation guarantee purposes took effect. Ordinary time earnings included over-award payments, shift loadings, allowances and piece rates paid in relation to a person’s ordinary hours of work. It did not include overtime payments.

Superannuation Guarantee Ruling (SGR) 2009/2

Later regulation specifically exempted parenting payments from definition of ‘ordinary time earnings’ for superannuation guarantee purposes.

9 July 2009

Superannuation funds were able to offer limited financial advice to their members.

Media release

21 August 2009

Release of the Matthews Report recommended that government superannuation pensions continue to be adjusted by increases in the Consumer Price Index (CPI). Government fully supported this recommendation.

Matthews Report

20 September 2009

The rate of the Age Pension was raised by $30 per week for single people. Existing pension supplements were consolidated into one pension supplement and increased by $2.49 per week for single people and $10.14 per week for couples.

The 25 per cent of male total average weekly earnings (MTAWE) adequacy benchmark was adjusted to 27.7 per cent for single people and 41.76 per cent for couples. A new prices measure called the Pensioner and Beneficiary Living Cost Index (PBLCI) was added to the pension indexation process. Where the increase in the PBLCI was greater than that for the CPI it would be used instead of the CPI in the indexation process.

The pension income test taper rate was increased from 40 per cent to 50 per cent. A work bonus was introduced that exempted half of any income from employment up to $500 per fortnight from consideration under the income test.

The Pension Bonus Scheme was abolished.

Social Security And Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Act 2009

14 December 2009

Clearer super choices, the Phase one–preliminary report of the review into the governance, efficiency, structure and operation of Australia’s superannuation system (Cooper Review) on superannuation fund governance was released.

Clearer super choices: matching governance solutions, Phase one–preliminary report

January 2010

There was to be formal inclusion of specific superannuation funds (usually industry funds) in industrial awards. This change did not restrict an employee’s right to have contributions made to a superannuation fund of their choice.

Fair Work Act 2009, paragraph 139(1)(i)

20 April 2010

MySuper, the second Phase one–preliminary report of the Cooper Review was released.

MySuper: optimising Australian superannuation, Second Phase one–preliminary report

29 April 2010

Self-managed super solutions, the Phase three–preliminary report of the Cooper Review was released.

Self-managed super solutions, Phase three–preliminary report

2 May 2010

Government response to Australia’s future tax system review (Henry Review) was released. The Government agreed to the following:

  • Superannuation guarantee rate to be raised to 12 per cent between 2013–14 and 2019–20
  • Superannuation guarantee age limit to be increased to 75 from 1 July 2013
  • an annual superannuation contribution of up to $500 provided for those receiving adjusted taxable income of up to $37,000 per annum and
  • the concessional contribution cap for those over age 50, with less than $500,000 in total superannuation benefits to be permanently raised from $25,000 to $50,000 per annum.

The proposed measures were repeated in budget papers released on 11 May 2010 (see below).

Media release

11 May 2010

2010-11 Budget announcements included:

  • changes to co-contributions scheme. Income thresholds applying for 2009–10 were to continue for a further two years and the government co-contribution rate was to be set permanently at $1 for every $1 of personal contributions made by those receiving an adjusted annual income less than $31,920 per annum
  • new low income government contribution for those on adjusted taxable incomes of up to $37,000. This was to commence from 2012-13
  • higher concessional contributions caps for individuals aged over 50 with superannuation balances below $500,000
  • progressively increase the superannuation guarantee rate from 9 per cent to 12 per cent by 2019-20
  • raise the superannuation guarantee age limit from 70 to 75 years.

Budget paper no. 2: 2010–2011

1 July 2010

Small business employees were able to fulfil their superannuation guarantee requirements by making payment to an approved clearing house.

Tax Laws Amendment (2010 Measures No. 1) Act 2010

1 July 2010

Implementation of 2010–11 Budget announcements relating to pausing of income thresholds for the Government co-contribution and permanent reduction in co-contribution rate at $1 for every $1 of personal contributions.

Tax Laws Amendment (2010 Measures No. 3) Act 2010

5 July 2010

Final report of the Cooper Review was released. It includes 177 recommendations covering ten broad areas of reform:

  • MySuper (a simplified low-cost default superannuation product) and choice of fund/default fund arrangements
  • trustee governance
  • investment governance
  • transparency of fund operations
  • insurance arrangements and fees
  • prudential requirements
  • retirement products and advice
  • self-managed superannuation funds
  • ‘backoffice’ industry arrangements, and
  • regulation.

Final Report

16 December 2010

Government formally accepted the bulk of Cooper Review’s recommendations (Stronger Super), including implementation of low cost superannuation funds (MySuper), streamlined back office procedures (Super Stream), strengthening the oversight of self-managed superannuation funds, strengthening APRA’s prudential supervision of the superannuation industry and increasing prudential requirements of trustees.

Media release

1 February 2011

Government announced that the establishment of a consultation panel to advise on the implementation of the Cooper Review recommendations.

Media release

13 April 2011

Government announced its decision to provide a grant of approximately $55 million in financial assistance to benefit the members of four superannuation funds that were formerly under the trusteeship of Trio.

Media release

10 May 2011

Government announced a range of measures including some linked to implementing the Cooper Review recommendations:

  • allowing superannuation fund trustees to use of tax file numbers (TFNs) from 1 July 2011 to locate multiple member accounts to assist in account consolidation
  • refund of excess concessional contributions
  • employees were to receive information on their payslips about the amount of superannuation actually paid into their account from 1 July 2012
  • concessional superannuation contribution cap of $50,000 for those aged over 50 years with a total superannuation balance of less than $500,000
  • extending the pause to the indexation of the income threshold for the superannuation co-contribution
  • payment of $55 million to compensate members of four superannuation funds, formerly under the trusteeship of Trio Capital Limited, which suffered losses due to fraudulent conduct.

Budget paper no. 2: 2011–12

10 May 2011

Access removed to the trading stock exception to the capital gains tax primary code rule for certain assets (primarily shares, units in a trust and land) owned by a complying superannuation entity.

Tax Laws Amendment (2012 Measures No. 1) Act 2012

1 July 2011

Implementation of greater use of TFNs to locate multiple member accounts to assist in account consolidation.

Tax Laws Amendment (2011 Measures No. 2) Act 2011

1 July 2011

Implementation of a limited refund of excess concessional contributions for taxpayers that breach the limit by $10, 000 or less if they do not have excess concessional contributions for an earlier financial year commencing on or after 1 July 2011.

Tax and Superannuation Laws Amendment (2012 Measures No. 1) Act 2012

1 July 2011

Regulations would be able to be made imposing rules on SMSF investment in collectables or personal use assets.

Tax Laws Amendment (2011 Measures No. 2) Act 2011

21 September 2011

Government announced its decisions on the key design aspects of its accepted recommendations from the Cooper review including:

  • MySuper products to have a single investment strategy and a standard set of fees except in certain circumstances
  • employers must make contributions for employees who have not chosen their fund, to a fund offering a MySuper product in order to satisfy superannuation guarantee obligations from 1 October 2013
  • by 1 July 2017, funds would need to transfer the existing default balances of members to a MySuper product
  • new processes for locating and consolidating multiple member accounts so that inactive accounts with balances under $1,000, and accounts in eligible rollover funds are automatically consolidated into the member’s current active account (unless the member opts out), and
  • requirements for employers to disclose on payslips when superannuation contributions are due to be paid.

Media release

 

Stronger super: Information pack

 

Stronger super: Outcomes of consultation process

1 October 2011

Merging superannuation funds could choose to take up capital gains tax loss relief where the transferring entity transfers assets to the receiving entity on or after 1 October 2011 and before 2 July 2017.

Superannuation Laws Amendment (Capital Gains Tax Relief and Other Efficiency Measures) Act 2012

29 November 2011

Government announced a number of changes to superannuation arrangements as part of the Mid-Year Economic and Fiscal Outlook including:

  • individuals who receive less than 10 per cent of their income through employment or business would not be eligible for the government low income superannuation contribution (consistent with the requirements for the low income Government superannuation co-contribution)
  • matching rate for the Government superannuation co-contribution to be reduced from $1 to $0.50, with the maximum benefit also to be reduced from $1,000 to $500. The maximum income threshold was also proposed to fall from $61,920 to $46,920
  • indexation of concessional contribution caps was proposed to be paused for one year in 2013-14 at $25,000 for individuals under the age of 50 and $50,000 for individuals aged 50 and over
  • extension of draw-down relief for account-based pensions to 2012-13 year, with a 25 per cent reduction in the minimum payment amount.

Media release

20  January 2012

Government formally announced a review of default superannuation funds arrangements by the Productivity Commission (PC) to design criteria for the selection and ongoing assessment of superannuation funds eligible for nomination as default funds in modern awards by Fair Work Australia.

Media release

21 March 2012

Superannuation fund members would be able to electronically request the consolidation of their superannuation benefits through the ATO.

Tax Laws Amendment (2011 Measures No. 9) Act 2012

8 May 2012

2012-13 Budget announced a number of superannuation-related measures including:

  • reduction in superannuation contributions tax concession from 30 per cent to 15 per cent for ‘very high’ income earners (those with income greater than $300,000) from 1 July 2012
  • capital gains tax relief for mergers of complying superannuation funds from 1 June 2012 to 1 July 2017
  • deferral of the 2010-11 Budget measure to increase the concessional contributions cap for individuals over 50 with a superannuation balance of less than $500,000 from 1 July 2012 to 1 July 2014
  • special industry levy on APRA-regulated superannuation funds to raise $467.1 million over 2012-13 to 2017-18 to implement SuperStream reforms.

Budget paper no. 2: 2012-13

27 June 2012

ATO was permitted to disclose details of an individual’s superannuation interests and superannuation benefits to specified classes of funds to enable the ATO to provide information about a member’s superannuation interests, including amounts held by the ATO. This information would enable funds to assist their members to find and consolidate their superannuation interests.

Tax and Superannuation Laws Amendment (2012 Measures No. 1) Act 2012

29 June 2012

Implementation of a framework to support the introduction of superannuation data and payment regulations and standards that would apply to specified superannuation transactions undertaken by superannuation entities, retirement savings account providers (RSA providers) and employers. Application of the standards would be staggered according to the following schedule:

  • RSA providers and trustees of a superannuation entity 1 July 2013
  • medium to large employer on 1 July 2014 in relation to conduct that occurs on or after 1 July 2014
  • small employer on 1 July 2014 in relation to conduct that occurs on or after 1 July 2015, unless the regulations prescribe an alternate application date after 1 July 2015.

Superannuation Legislation Amendment (Stronger Super) Act 2012

29 June 2012

Productivity Commission (PC) released draft report on review of default superannuation arrangements. PC’s preferred options were for a body that is either part of, or separate to, the Fair Work Authority to undertake assessments about the selection of default superannuation funds. Final report was to be submitted to the Government in October 2012.

 

1 July 2012

Government low income superannuation contribution came into effect, providing for a government contribution of 15 per cent of eligible contributions up to a maximum of $500 for eligible individuals on adjusted taxable incomes of up to $37,000 (not indexed).

Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Act 2012

1 July 2012

Implementation of arrangements for the temporary levy on APRA-regulated funds to support the costs of SuperStream measures.

Superannuation Supervisory Levy Imposition Amendment Act 2012

Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Act 2012

1 July 2012

Superannuation providers were required to provide statements for all members who held an interest in the superannuation plan at any time during a reporting period, not just those for whom contributions were received. The amendments apply to the 2012-13 financial year, for which the first member statements were due by October 2013.

Superannuation Laws Amendment (Capital Gains Tax Relief and Other Efficiency Measures) Act 2012

1 July 2012

Key thresholds changed for the superannuation co-contribution scheme to apply for the 2012–13 income year onwards:

  • reducing rate of payment for the superannuation co-contribution from 100 per cent to 50 per cent
  • decreasing the maximum amount payable from $1,000 to $500
  • extending the freeze on the indexation of the lower income threshold for the 2012-13 income year and
  • setting the higher income threshold at $15,000 above the lower income threshold (down from $30,000).

Tax and Superannuation Laws Amendment (2013 Measures No. 2) Act 2013

1 July 2012

Reduced tax concession for individuals with income above $300,000 receive on their concessional superannuation contributions from 30 per cent to 15 per cent for the 2012-13 income year. Special rules for working out the tax for:

  • individuals with defined benefit interests
  • State higher level office holders with superannuation contributions to constitutionally protected funds
  • Commonwealth justices and judges in respect of contributions for a defined benefit interest in a superannuation fund established under the Judges’ Pensions Act 1968.

Former temporary residents who received a departing Australia superannuation payment to which withholding tax applied would be eligible for a refund of the amount tax paid and release from liability for tax, as they effectively do not receive any concessional tax treatment on their contributions to superannuation.

Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Act 2013

Superannuation (Sustaining the Superannuation Contribution Concession) Imposition Act 2013

22 August 2012

Government submission to the PC review of default superannuation arrangements proposed that funds seeking to be listed as default funds in modern awards should have the opportunity to put an Expression of Interest to the expert panel within Fair Work Australia, which would assess the funds against legislated criteria proposed by the PC.

Media release

9 September 2012

APRA was granted the power to make prudential standards for regulated superannuation funds.

Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Act 2012

12 October 2012

Productivity Commission report on default superannuation arrangements was released. The report recommended that decisions on the listing of default products should be made by a new ‘Default Superannuation Panel’ within Fair Work Australia, with the APRA MySuper product authorisation framework providing a first filter for the selection of products and a set of non-prescriptive factors (such as investment objectives, performance, fees and costs) as a second stage ‘quality filter’ when selecting default products for modern award.

Default superannuation funds in modern awards

22 October 2012

Government announced revised arrangements relating to lost and unclaimed moneys. In relation to superannuation:

  • the account balance threshold below which inactive accounts, and accounts of uncontactable members, are required to be transferred to the ATO are proposed to be increased from $200 to $2,000
  • the period of inactivity before an account of an unidentifiable member is required to be transferred to the ATO would be reduced from five years to 12 months.
  • interest at a rate equivalent to Consumer Price Index (CPI) inflation from 1 July 2013 on all reclaimed superannuation accounts.

Additional measures announced relating to superannuation included:

  • increases to SMSF levy and changes to payment arrangements
  • allowing the tax exemption for earnings on assets supporting superannuation pensions to continue following the death of a fund member in the pension phase until the deceased member’s benefits have been paid out of the fund
  • providing $10 million over three years as a contribution to a non-government investment fund, the earnings of which will be used to fund the ongoing costs of a new Superannuation Consumer Centre (SCC)
  • reducing the SuperStream component of the Superannuation Supervisory levy being collected from APRA-regulated superannuation funds designed to recover the Government’s costs of implementing SuperStream.

2012–13 Mid-Year Economic and Fiscal Outlook

29November 2012

In a speech to the 2012 National Conference of the Association of Superannuation Funds of Australia (ASFA), Paul Keating considered that a contribution of 12 per cent of wages was not sufficient for retirement because of increased longevity.  Proposed policies to address the increase in longevity included compulsory deferred annuities or to increase contributions to 15 per cent via employer contributions or through a government pooled insurance fund.

Extract from opening address to ASFA conference

2012 National Conference of ASFA [Keating, speaking notes]

December 2012

Legislation allowing individuals to transfer their retirement savings between an Australian complying superannuation fund and a New Zealand KiwiSaver scheme received Royal Assent. Commencement was scheduled for 1 July 2013.

Superannuation Legislation Amendment (New Zealand Arrangement) Act 2012

30 December 2012

The balance threshold below which small lost accounts were required to be transferred to the Commissioner increased from $200 to $2,000. The period of inactivity before inactive accounts of unidentifiable members would be required to be transferred to the Commissioner decreased from five years to 12 months.

Treasury Legislation Amendment (Unclaimed Money and Other Measures) Act 2012

1 January 2013

Funds would be able to lodge MySuper applications. Key features of a MySuper product include:

  • there is a single diversified or lifecycle investment strategy
  • all members have access to the same options and facilities
  • the MySuper product is only for the pre-retirement phase
  • only permitted fees can be deducted from member accounts and the permitted fees are the same for all members in the MySuper product, with the exception of the administration fee.

Trustees able to have a single cap on percentage based administration fees. The amount of the administration fee can be capped at a specified amount, and must be the same for all members of that MySuper product.

Superannuation Legislation Amendment (MySuper Core Provisions) Act 2012

Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Act 2013

1 January 2013

Various additional rules about fees within MySuper were enacted including not charging a fee that relates to the payment of conflicted remuneration to a financial services licensee, arrangements for intra-fund advice, prohibition of entry fees and limiting exit fees, switching fees and buy-sell spreads to being charged on a cost-recovery basis.

Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Act 2012

1 January 2013

Registrable superannuation entity (RSE) licensees must be authorised by APRA to operate an eligible rollover fund (ERF). New enhanced trustee obligations would apply to a trustee of an RSE that has been authorised by APRA to offer an ERF as members fully rely on the trustee to make judgments about managing their superannuation. These enhanced trustee obligations required trustees to comply with a duty to promote the financial interests of members of the fund.

Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Act 2012

31 January 2013

Registration regime for SMSF auditors commenced.  Auditors would be required to meet initial and ongoing requirements relating to their qualifications, competency and independence. ASIC is responsible for the registration of SMSF auditors, setting competency standards and taking enforcement action against auditors who have not met their on‑going obligations.

Superannuation Laws Amendment (Capital Gains Tax Relief and Other Efficiency Measures) Act 2012

Superannuation Auditor Registration Imposition Act 2012

5 April 2013

Government announced changes to ‘improve the fairness, sustainability and efficiency of the superannuation system’. Changes included:

  • capping the tax exemption for earnings on superannuation assets supporting income streams at $100,000 from 1 July 2014, with  a concessional tax rate of 15 per cent applying thereafter, and applying the same treatment to defined benefit funds
  • providing for a uniform $35,000 concessional contributions cap for those aged 60 years or over from 1 July 2013 and from 1 July 2014 for those aged 50 years or over
  • changing the treatment of concessional contributions in excess of the annual cap from 1 July 2013 to allow individuals to withdraw excess contributions and to tax these contributions at the individual's marginal tax rate, plus an interest charge
  • extending the normal deeming rules from 1 July 2015 to superannuation account-based income streams
  • extending concessional tax treatment to deferred lifetime annuities from 1 July 2014
  • increasing threshold of $2,000 to $2,500 from 31 December 2015 and then $3,000 from 31 December 2016 for the transfer of superannuation account balances to the ATO for inactive accounts and accounts of uncontactable members.

The Government also announced establishment of a ‘Council of Superannuation Custodians’ to ensure that future changes ‘are consistent with an agreed Charter of Superannuation Adequacy and Sustainability’.

Media release

9 May 2013

Government appointed a ‘Charter Group’ to conduct consultations on the Charter of Superannuation Adequacy and Sustainability. This included developing and recommending a Charter of Superannuation Adequacy and Sustainability ‘which embodies the principles of certainty, adequacy, fairness and sustainability’.

Discussion paper was released to assist in the consultation process.

Media release

 

Discussion Paper: Charter of Superannuation Adequacy and Sustainability and Council of Superannuation Custodians

14 May 2013

The 2013–14 Budget included a restatement of the policies announced in April 2013 along with several other measures including:

  • amending parameters of the 2012–13 Budget measure to reduce the contributions tax concession for those earning more than $300,000
  • further grants of financial assistance to compensate members of four superannuation funds, formerly under trusteeship of Trio Capital Limited (Trio), that suffered losses due to fraudulent conduct
  • additional funding for the Superannuation Complaints Tribunal
  • amending the eligibility criteria for the low income superannuation contribution to pay individuals with an entitlement below $20 (cost $15 million over four years).

Budget paper no. 2: 2013–14

1 July 2013

Superannuation guarantee charge was increased from 9 per cent to 9.25 per cent.

Superannuation Guarantee (Administration) Amendment Act 2012

1 July 2013

Maximum age limit for superannuation guarantee charge (70 years) was abolished.

Superannuation Guarantee (Administration) Amendment Act 2012

1 July 2013

Suspension of the indexation of the concessional contributions cap as announced in November 2011. This also resulted in a pause in the indexation of the concessional contributions cap for individuals aged 50 years and over and the non-concessional contributions cap. Indexation is to resume from 1 July 2014 when the cap is expected to rise to $25,000.

Tax and Superannuation Laws Amendment (2012 Measures No. 1) Act 2012

1 July 2013

Proposed commencement date for implementation of requirements for employers to report on payslips information related to the payment of superannuation contributions.

Tax and Superannuation Laws Amendment (2012 Measures No. 1) Act 2012

1 July 2013

Commencement of enhancements to superannuation trustee obligations including requiring a trustee to put the interests of members of funds first at all times and clearly identifying the duties that apply to directors of superannuation funds, including to act honestly and in the best interests of members.

Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Act 2012

1 July 2013

Superannuation funds able to offer and pay superannuation contributions into MySuper products from this date.

Superannuation Legislation Amendment (MySuper Core Provisions) Act 2012

1 July 2013

A trustee of a superannuation fund must provide MySuper members with benefits by way of insurance that are for death and benefits that are consistent with the definition of permanent incapacity in the regulations. A relevant member must have the option to opt-out of life and total permanent disability insurance unless the fund meets conditions prescribed in the regulations.

Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Act 2012

Superannuation Legislation Amendment Regulation 2013 (No. 1)

1 July 2013

A number of additional data collection and reporting requirements were imposed on APRA and specified funds including:

  • expanded powers to collect more accurate and complete data on the investments and costs of superannuation entities
  • requirements for APRA to publish information on the returns, fees and costs of all MySuper products quarterly. This requirement does not limit APRA from publishing other information regarding MySuper or other superannuation products
  • RSE licensees will be required to publish a ‘product dashboard’ for each of the fund’s MySuper and choice products on a part of their website that is accessible to the public at all times
  • Funds will also have to disclose the remuneration of directors and executive officers. Regulations will specify other documents to be published on a fund’s website to promote transparency
  • RSE licensees will be required to publish information regarding their portfolio holdings on their website. The RSE licensee must publish portfolio holdings as at the reporting day, which will occur once every six months on 30 June and 31 December, within 90 days after each reporting day.

Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Act 2012

1 July 2013

Increase in the maximum levy payable by an SMSF and change to the timing of the payment for 2013–14 financial year and later years.

Superannuation Legislation Amendment (Reform of Self Managed Superannuation Funds Supervisory Levy Arrangements) Act 2013

Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Amendment Regulation 2013 (No. 1)

1 July 2013

Interest would be payable on all unclaimed superannuation money payments in respect of individuals.

Treasury Legislation Amendment (Unclaimed Money and Other Measures) Act 2012

1 July 2013

Any provisions in a fund’s governing rules that require the trustee to use a specified service provider, investment entity or financial product would be overridden except where the arrangements is specified by law.

Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Act 2013

1 July 2013

APRA would be able to issue infringement notices for minor and straight-forward breaches of the SIS Act.

Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Act 2013

1 July 2013

Superannuation trustees required to provide eligible persons, generally on request, with the reasons for decisions made in relation to a complaint.

Increase in the time limits to lodge complaints with the Superannuation Complaints Tribunal regarding total and permanent disability (TPD) claims.

Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Act 2013

1 July 2013

Information in each MySuper product dashboard about fees and other costs would need to be updated within 14 days after the end of a period prescribed in regulations. Key information to be included in the product dashboard is identified in general terms, with detail of the requirements able to be prescribed in regulations. The requirement to include a statement about the liquidity of a member’s investments has been removed.

Requirement to make portfolio holdings public would apply in relation to the 30 June 2014 reporting day and later reporting days.

Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Act 2013

1 July 2013

Interest paid by the Commonwealth on payments of unclaimed superannuation from 1 July 2013, other than interest paid to former temporary residents, would be a tax free component of a superannuation benefit.

Interest paid on the return of unclaimed superannuation to former temporary residents after 1 July 2013 would be subject to Departing Australia Superannuation Payment (DASP) tax at a rate of 45 per cent. Interest paid to current residents of Australia in respect of unclaimed superannuation is not subject to DASP tax.

Tax and Superannuation Laws Amendment (2013 Measures No. 1) Act 2013

1 July 2013

Duties of superannuation trustees expanded to require the establishment and implementation of procedures by 30 June 2014 to identify and, where appropriate, merge multiple accounts of a member.

Tax and Superannuation Laws Amendment (2013 Measures No. 2) Act 2013

1 July 2013

Member protection standards were repealed. These standards provided that a member with an account balance of less than $1,000 could not have their balance reduced by administrative fees that are greater than the earnings accruing to their account. However, trustees could deduct administrative fees in years with a negative investment return despite a member’s balance being less than $1,000.

Superannuation Industry (Supervision) Amendment Regulation 2013 (No. 2)

1 July 2013

Concessional contributions cap was increased to $35,000 (not indexed) for the 2013‑14 financial year for individuals aged 60 years and over.

Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Act 2013

1 July 2013

A number of technical changes to the low income superannuation contribution (LISC) applied including:

  • introducing  an estimations process that allows the Commissioner for Taxation to determine a person’s eligibility for the LISC
  • ensuring that all concessional contributions for a year attract LISC, including allocations from reserves and notional taxed contributions
  • replacing the existing minimum payment rule so that any individual that is entitled to less than $10 of LISC will have their entitlement rounded up to $10
  • enabling the Commissioner to not rectify small overpayments and underpayments of the LISC that are less than $10 and
  • requiring tabling of quarterly and annual Parliamentary reports on the LISC with details to be specified in the regulations.

Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Act 2013

1 July 2013

Income tax relief applied to superannuation funds where there is a mandatory transfer of default members’ account balances to a MySuper product in another superannuation fund between 1 July 2013 and 1 July 2017.

Superannuation Laws Amendment (MySuper Capital Gains Tax Relief and Other Measures) Act 2013

1 July 2013

Changed arrangements for the taxation of excess concessional contributions for the 2013-14 income year and later income years so that:

  • individuals can elect to release an amount of these excess concessional contributions from their superannuation. Any released amounts proportionately reduce their non-concessional contributions
  • a charge is imposed so that taxpayers who have concessional contributions in excess of their annual cap are taxed at their marginal rate rather than at the highest marginal rate.

Tax Laws Amendment (Fairer Taxation of Excess Concessional Contributions) Act 2013

Superannuation (Excess Concessional Contributions Charge) Act 2013

5 July 2013

Report of the Charter Group appointed on 9 May 2013 to develop and recommend a Charter of Superannuation Adequacy and Sustainability and to develop and recommend an appropriate structure for a Council of Superannuation Custodians. Key recommendations included:

  • that there should be legislation establishing a ‘Super Council’ that would administer a ‘Super Charter’
  • that the Council perform an advisory function only and that it have no regulatory powers, but that it does have the power to initiate its own inquiries into matters connected with the Charter principles.
  • that the Council be independent of government and that its members be called ‘guardians’.

A Super Charter: fewer changes, better outcomes

31 July 2013

Government announced that it would make no ‘major’ changes to superannuation tax policy for five-year periods.

The Government also announced that it would bring forward legislation to establish the Super Council to ensure any future changes to superannuation are consistent with an agreed Charter of Superannuation Adequacy and Sustainability. The Charter would include the commitment to a five-year moratorium on changes to superannuation tax policy.

Media release

2 August 2013

Government announced that the threshold below which small inactive superannuation accounts, including inactive accounts of uncontactable members, are required to be transferred to the ATO would be increased from $4,000 to $6,000 from 31 December 2016. This builds on an earlier announcement to increase the threshold from $2,000 to $4,000 from 31 December 2015.

Economic Statement

Media release

August and September 2013

Coalition release pre-election policy on superannuation. Key proposals include:

  • not making any ‘unexpected detrimental’ changes to superannuation
  • superannuation guarantee to increase from 9 per cent to 12 per cent but gradual increase delayed by two years
  • revisit concessional contributions caps and incentives, such as co-contributions, for lower income earners ‘once the Budget is back in strong surplus’
  • align corporate governance in superannuation more closely with governance principles applicable to ASX listed companies
  • conduct a review of minimum withdrawal amounts from account-based superannuation pensions
  • allow small businesses to remit superannuation guarantee payments to the ATO as part of regular tax payments, with the ATO to distribute amounts to individual accounts, and
  • discontinuing the low income superannuation contribution.

The Coalition’s policy for superannuation

 

The Coalition’s policy for small business

 

Fiscal budget impact of Federal Coalition policies

31 October 2013

Obligation of RSEs to disclose executive officer remuneration and other information was deferred from 1 July 2013 to commence from 31 October 2013.

ASIC Class Order [CO 13/830] - RSE licensees of registrable superannuation entities

6 November 2013

Government announces decisions and further consultation on a range of previously announced—but not legislated—tax and superannuation measures. Measures which would not proceed included:

  • capping the tax exemption for earnings on superannuation assets supporting income streams at $100,000 from 1 July 2014
  • Council of Superannuation Guardians and Charter of Superannuation Adequacy and Sustainability

Measures that would proceed included increasing the threshold below which lost accounts are required to be transferred to the ATO from $2,000 to $4,000, and then to $6,000.

A further 64 measures would be the subject of further consultation.

Media release

28 November 2013

Government releases consultation paper on governance, transparency and default superannuation in modern awards.

Better regulation and governance, enhanced transparency and improved competition in superannuation

Media release

14 December 2013

Government announces final decision on whether to proceed with 64 tax and superannuation measures that were subject to further consultation after its 6 November 2013 announcements. Measures which the Government indicated would proceed included:

  • the introduction of penalties for promoting illegal early release of superannuation, and
  • providing the ATO with penalty options for breaches by SMSFs.
  • Measures which the Government indicated would not proceed included:
  • encouraging the take-up of deferred lifetime annuities (this was to be considered as part of a proposed review)
  • inter-fund consolidation of accounts less than $1,000
  • prescribing additional rules for the acquisition and disposal of certain assets between SMSFs and related parties.

Media release

17 December 2013

Government releases 2013–14 Mid‑Year Fiscal and Economic Outlook. In addition to previously announced measures, the statement included:

  • the transfer of the Small Business Superannuation Clearing House to the ATO from April 2014
  • minor savings to superannuation advertising and other consumer activities.

2013–14 Mid‑Year Fiscal and Economic Outlook

1 January 2014

Default funds listed in modern awards (other than exempt public sector superannuation schemes) must be authorised to offer a MySuper product. The Fair Work Commission (formerly Fair Work Australia) is required to conduct a ‘one-off’ process to ensure, as far as possible, that on 1 January 2014 modern awards do not purport to nominate any default funds that do not comply with MySuper requirements. A term of an enterprise agreement will be an unlawful term and of no effect to the extent that it nominates a default fund that does not comply with this requirement.

Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Act 2012

1 January 2014

Expert panel to be created within the Fair Work Commission to conduct four-yearly reviews of default fund arrangements in modern awards and to list eligible MySuper products that are to be used as default funds where an employee does not nominate a superannuation fund. In making its assessment, the Fair Work Commission is required to consider a range of factors including:

  • the appropriateness of the MySuper product’s long term investment return target and risk profile
  • the superannuation fund’s expected ability to deliver on the MySuper product’s long term investment return target, given its risk profile and
  • the appropriateness of any insurance offered in relation to the MySuper product.

Fair Work Amendment Act 2012

1 January 2014

Employers must make superannuation guarantee contributions for employees who have not made a choice of fund to a fund that offers a MySuper product.

Superannuation Legislation Amendment (MySuper Core Provisions) Act 2012

1 July 2014

Superannuation guarantee charge to increase from 9.25 per cent to 9.5 per cent.

Superannuation Guarantee (Administration) Amendment Act 2012

1 July 2014

Concessional contributions cap to increase to $35,000 (not indexed) for the 2014‑15 financial year for individuals aged 50 years and over.

Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Act 2013

1 January 2015

Corporate fund MySuper offerings and customised employer MySuper offerings from retail funds will be able to be listed in modern awards, provided they satisfy a selection process.

Superannuation Laws Amendment (MySuper Capital Gains Tax Relief and Other Measures) Act 2013

1 July 2015

Superannuation guarantee charge to increase from 9.5 per cent to 10 per cent.

Superannuation Guarantee (Administration) Amendment Act 2012

1 July 2016

Superannuation guarantee charge to increase from 10 per cent to 10.5 per cent.

Superannuation Guarantee (Administration) Amendment Act 2012

1 July 2017

Superannuation guarantee charge to increase from 10.5 per cent to 11 per cent.

Superannuation Guarantee (Administration) Amendment Act 2012

1 July 2017

All RSE licensees generally have until 1 July 2017 to transfer all accrued default amounts to a MySuper product unless the member opts-out in writing.

Mandatory transfers of account balances can transfer losses and defer income tax liability.

Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Act 2012

Superannuation Laws Amendment (Capital Gains Tax Relief and Other Efficiency Measures) Act 2012

July 2017

The qualifying age for the Age Pension will increase by six months every two years until it reaches 67 years of age on 1 January 2024.

Social Security And Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Act 2009

1 July 2018

Superannuation guarantee charge to increase from 11 per cent to 11.5 per cent.

Superannuation Guarantee (Administration) Amendment Act 2012

1 July 2019

Superannuation guarantee charge to increase from 11.5 per cent to 12 per cent.

Superannuation Guarantee (Administration) Amendment Act 2012

 

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