The extension of the government's capital gains taxation (CGT) rollover relief for super fund mergers is still within reach, the Association of Superannuation Funds of Australia (ASFA) has said.
"We, as an industry, must . drive the extension of the capital gains tax relief - we are nearly there," ASFA chief executive Pauline Vamos said at a luncheon earlier this week.
Vamos said the association had been pushing for an extension within every forum, including its budget submission, and said it was slowly making progress.
"[Financial Services and Superannuation] Minister Bill Shorten has argued that the removal of the CGT relief is not an impediment to mergers. But he is beginning to acknowledge that is," she said.Many super fund assets still have not fully recovered in price from the sell-off during the global financial crisis.
This means many funds are still carrying paper losses in their portfolios, which would be realised if they decided to merge under a regime that did not provide CGT rollover relief.
Vamos said there was one merger on the cards where members could be impacted on by up to 2.1 per cent for 2011 annual returns if the relief was not extended.
"We've got to change it. The members' bottom line is being affected," Vamos said.
ASFA has argued in its submission to the 2011 budget for the government to extend the rollover relief for a minimum of two years, but said it preferred to have the relief made permanent.
The association is also seeking to abolish the requirement for a merger to be completed within 12 months after the intention to merge has been announced.
