Super industry feels pressure

Super industry feels pressure

Pressure is mounting on commercial superannuation funds to follow the Rudd Government’s lead in recognising gay and lesbian families.

The Association of Superannuation Funds of Australia (ASFA) is lobbying its non-government members, including retail, industry, and corporate funds, to change their definitions to include same-sex partners as spouses for tax exemptions.

The ASFA National Roadshow will put the case to funds throughout April, but ASFA CEO Pauline Vamos said same-sex couples should call their fund too.

Many funds have automatically adopted the new inclusive definitions [from the Government] because of their type of constitution. But for others it may take some time for them to change their definitions. It’s important that people ask, she said.

Although Vamos hadn’t encountered any resistance to the policy among ASFA members, another industry peak body opposed changes during last year’s same-sex equality reforms.

Industry Funds Forum (IFF), representing the industry-based funds such as HOSTPLUS for hospitality workers and HESTA for nurses as well as the Catholic Superannuation Fund, lobbied against the more complex partner definitions in the Superannuation Industry (Supervision) Act.

Industry fund members could already nominate a same-sex partner as a dependent, IFF executive officer Helen Hewett argued, and the new definitions instead increased the chances of complaints.

A call to industry fund Media Super confirmed a same-sex partner may be nominated, however, the nomination isn’t binding, so the trustee could arbitrarily direct the funds to a former spouse, parent or sibling.

Many funds allow a binding nomination of a current legally-married spouse and also carry a tax exemption. A recognised spouse may also make tax-free contributions to their partner’s superannuation. Some funds, like AustralianSuper, changed over automatically. Most have not.

In most cases employees can switch their super to a fund that recognises same-sex partners, Vamos said, but they need to be cautious.

You really do need to look at the fund you’re in. You can opt out of most corporate funds, but you may lose other benefits. So you have to be careful because you may lose extra contributions by the employer, which can be substantial.

Another option is to belong to more than one fund. You can contribute a smaller amount into that other fund to cover insurance benefits or start providing a separate amount for another beneficiary.

She advised people to seek financial advice from someone experienced in the tax complexities of superannuation before committing to a fund.

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