In the May 31 statement, announcing that the new trans-Tasman super portability scheme had been finalised, Mr Shorten outlined a number of key features of the scheme, including that “participation is voluntary for members and for superannuation funds and schemes”.
Although this statement was not qualified, a close reading of the regulations, tabled in the House of Representatives on June 3 and in the Senate on June 17, reveals this is not strictly the case. While accepting transfers is voluntary, and it is voluntary for members if they want to request their funds be transferred, actioning those transfers upon request from New Zealand does not appear to be voluntary for Australian funds.
“The trustee must pay the member’s benefits to the KiwiSaver scheme no later than 30 days after being satisfied about all of the matters prescribed in subregulation 12A.10(3),” the legislation states.
The prescribed matters it refers to include that the fund is satisfied the member has permanently emigrated to New Zealand, and has relevant details for both the member and the KiwiSaver scheme.
New Zealand media has recently been highly critical of Australian funds for not immediately releasing money upon request, with Fairfax’s stuff.co.nz claiming that Australian super funds are “illegally” holding “Kiwi cash” and APN’s The New Zealand Herald being highly critical of cross-Tasman manager AMP, which it claims told one resident it would take until the end of next year to transfer her funds across.
An AMP spokesperson told InvestorDaily that AMP will make full portability between Australia and New Zealand available for super customers.
“We’re waiting for further clarity on some aspects of the legislation in Australia but have started in the Australian side of the portability process and our New Zealand business. The processes to enable transfers will be in place shortly,” the spokesperson said.
“We’ve got a significant presence in Australia and New Zealand so our priority is to get it in place as soon as we can.”
A spokesperson from AustralianSuper said the fund is currently looking at the regulations and is talking with its administrator, SuperPartners, about how it might work.
The reports from Fairfax’s stuff.co.nz do note the very short timeframes to which Australian funds have been subjected, as well as the large amount of other legislation that funds here are currently being required to deal with.
Minter Ellison partner Maged Girgis told InvestorDaily the regulations passed by the government to give effect to the trans-Tasman amendment do not appear to have changed the requirement for Australian super fund trustees to take action on transfers within 30 days.
“The regulations have been amended to strengthen that position, with the regulation that specifically requires trustees to transfer within 30 days of receiving prescribed info about proposed KiwiSaver transfers,” he said.
“This is probably not well understood within the industry and a lot of super funds would be tempted to believe that they have the option of transferring members’ benefits based on the media release issue by the Government on 31 May.”
InvestorDaily has approached the Association of Superannuation Funds of Australia and the Australian Institute of Superannuation Trustees (AIST) for comment.
***Update***
The AIST says it is aware super funds have to comply with any request to transfer a member’s benefit to New Zealand within 30 days of receipt of all supporting documentation, but added requests to date have been minimal, according to industry feedback.
