The federal government has released draft legislation aimed at reducing the incidence of lost and inactive superannuation accounts.
The exposure draft of the Superannuation Laws Amendment Regulation 2015 shows that the legislation would enable eligible rollover funds to consolidate accounts they hold into active superannuation accounts of members without their consent, a statement from the Treasury said.
Industry Super Australia (ISA) has welcomed the draft legislation, arguing that there is approximately $15 billion held in lost super accounts.
ISA chief executive David Whiteley said: “Lost super is being gouged by the for-profit sector’s eligible rollover funds through high fees and low returns.
“On a small balance, these higher fees and lower returns will quickly reduce an account balance to zero.
“With over six million lost accounts worth over $15 billion, lost super is big business for the banks and insurance companies, whose first loyalties are to their shareholders.”
The legislation will remove the rule that prevents the identification of certain lost inactive members. The changes will also ensure that members who digitally interact with their super fund are not inadvertently deemed to be lost members.
The Treasury has invited submissions on the draft legislation, which close on 20 October 2015.
The changes are set apply from 30 June 2016.
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