The Government has released exposure draft legislation proposing to require superannuation trustees to consolidate multiple inactive accounts (less than $1,000) within their fund on an annual basis. The proposed amendments to the SIS Act will require trustees to establish and publish rules setting out a procedure for consolidating a member’s inactive accounts. An “inactive superannuation interest” will be defined to exist where an account has a withdrawal benefit of under $1,000, and no contributions, rollovers or transfers have been made to the account for 2 years or more, or the account is a “lost account”. Consolidation will occur without the requirement for member consent. Trustees will not be allowed to charge fees for this consolation process, and will be subject to a strict liability penalty of $5,500 if they do not comply. The measures will not apply to SMSFs or defined benefit interests.
DATE OF EFFECT: The amendments will commence on 1 July 2012.
COMMENTS are due by 13 April 2012.
[LTN 59, 27/3]