SMSF Association supplementary submission on choice and account proliferation and superannuation guarantee non-payment

The Self Managed Super Fund Association (SMSFA) welcomes the opportunity to make a supplementary submission to the Senate Economics Legislation Committee regarding superannuation fund choice and account proliferation and superannuation guarantee non-payment.

Choice and account proliferation

The SMSFA believes the ability for all employees to choose their superannuation fund is an important element in promoting an efficient and competitive superannuation sector. We believe that constraining employee choice has negative effects of disengaging people from their superannuation, reducing competition and increasing account proliferation.

Account proliferation can occur where employees change employers or work in multiple causal or part-time jobs and are unable to direct their superannuation guarantee contributions to a fund of their choice. Instead, they are forced by an award or enterprise agreement to contribute to a mandated superannuation fund. This can cause individuals to accrue a number of superannuation accounts as they change employers or take on new work.

We strongly believe that choice of fund will help reduce the number of superannuation accounts per worker, rather than cause it to increase. This will be assisted through improved digital solutions, especially the Australian Taxation Office’s (ATO’s) superannuation portal on MyGov.gov.au which allows for simple consolidation of superannuation accounts. We believe that this has already played an important role in reducing account numbers.