The federal government's plans for automatically consolidating superannuation member accounts is still a point of friction in the superannuation industry, following the release of the Stronger Super package yesterday.
The government announced that from January 2014 accounts with less than $1000 would be automatically consolidated to the current active account unless the member opted out.
The process will be initiated by the Australian Taxation Office (ATO) and conducted annually on accounts that have not received contributions for two years.
By the end of 2014, the threshold for auto-consolidation will be increased to accounts with less than $10,000, although this level is subject to a review of the threshold by Treasury, the ATO and the Australian Prudential Regulation Authorirty (APRA).
But the Australian Institute of Superannuation Trustees (AIST) said auto-consolidation should be extended to all account sizes.
"If auto-consolidation is to have a real impact on the $19 billion lost super problem, it needs to be applied to all inactive accounts, irrespective of balance size," AIST chief executive Fiona Reynolds said.
The Financial Services Council (FSC), on the other hand, welcomed the measures.
"We are pleased to see the government has adopted the Financial Services Council's recommendation for tick-a-box account consolidation for balances greater than $1000," FSC chief executive John Brogden said.
The Stronger Super package also includes a process for employees to consolidate their own accounts when they begin a new job, which will be started between July and December 2014.
"We know that people change jobs, on average, every seven years, so providing them with a method to consolidate their accounts and avoid paying unnecessary fees at this point is a sensible move," Reynolds said.
She predicted that as many as four out of five working Australians would end up in a MySuper product by 2017.
The government also has committed to mandatory data standards under SuperStream.
It is an important decision, because earlier attempts at streamlining the back office under the SwimEC have failed due to the lack of coercion.
By July 2013, data standards and use of e-commerce will become mandatory for APRA-regulated funds and self-managed superannuation funds for processing rollovers and accepting contributions.
By July 2014 this will become mandatory for large and medium employers.
Whether the data standards would become mandatory for small employers was still the subject of further consultation, but could be introduced by July 2015, the government said.
"It's vital that employers and super funds move to electronic funds transfer if we are going to move the super sector into the 21st century," Reynolds said.
"If employers are going to come on board, the standards need to be mandated.
"However, the government has stopped short of mandating standards for small business - which will be subject to a review from July 2015 in consultation with employer bodies.
"We will continue to push for small business to be included in this framework."
The SuperStream working group will continue to oversee the development of data standards until the end of this year.
The government will establish a SuperStream Advisory Council to provide advice to government on the governance and oversight of the data standards when they are implemented.
It is expected the council will be established in early 2012.
