At the core of the opposition to the Government’s approach is the suggestion that the draft legislation and the insertion of the word ‘financial’ into best interests effectively reverses legal burden of proof for superannuation fund trustees.
Law Council of Australia representative, Natalie Cambrell said the LCA actually rejected the view that the best interests duty was in need of clearer articulation, particularly by legislation.
“Both the proposal to add the word ‘financial’ to the existing best interests covenant and the proposal to reverse the evidential burden of proof are not warranted,” she said.
Ai Group chief policy officer, Peter Burn said the approach taken in the legislation to protect member interests was poorly conceived and poorly designed.
Retirees could face a 15 per cent tax on superannuation earnings to help fund aged care services under a new federal budget proposal from the social services council.
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She noted that those who had access their super early would find it difficult to make up the lost ground in their savings without targeted policy intervention.
AIST recommended a one-off Government contribution to the super accounts of low-income earners who accessed their super early and met the eligibility criteria. The contribution would be based on the proportion of balance withdrawn and no more than $5,000.
“Addressing the COVID-19 super gap will not only ensure Australians aren’t penalised in retirement for an economic downturn driven by a health crisis that they had no control over, it will also reduce the extent to which they are required to rely on the taxpayer-funded age pension in retirement,” Scheerlinck said.