Explanatory Memorandum
(Circulated by authority of the Minister for Housing and Assistant Treasurer the Hon Michael Sukkar MP)General outline and financial impact
Putting Members' Interests First
This Bill contains amendments to the SIS Act to protect individuals' retirement savings from erosion, ultimately increasing Australians' superannuation balances.
Date of effect: 1 October 2019
Proposal announced: This Bill partially implements the Protecting Your Super Package announced in the 2018-19 Budget.
Financial impact: The Bill is estimated to have a gain to the budget of $605.4 million over the forward estimates.
Human rights implications: This Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 3.
Compliance cost impact: Medium to high
Summary of regulation impact statement
Regulation impact on business
Impact: Combined with the amendments contained in the Treasury Laws Amendment (Protecting Your Superannuation Package) Act 2019, the amendments have an estimated annual compliance cost impact of $28.5 million averaged over 10 years.
Main points:
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- The current superannuation regulatory framework provides no special protection for the erosion of retirement savings of low balances through fees and premiums for default insurance.
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- The scope of the RIS is the impact of excessive fees, inappropriate insurance arrangements and duplication of accounts on individuals. Addressing the root causes of account proliferation is beyond the scope of the RIS.
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- Three options were considered and detailed in the RIS.
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- Overall, Option 2 was determined as the preferred approach as it provides the greatest benefit to members at the lowest regulatory burden.