Superannuation
Few Aussies likely
to move super: report
15:31 AEDT Wed Feb 2 2005
Around eight per cent of Australians will take
advantage of new laws, in effect by July, to move their
superannuation, a new report has found.
The report, by the Association of Superannuation Funds of
Australia (ASFA), found 7.5 per cent of total super assets will
move between funds as people exercise their choice.
From July 1, up to 5.7 million people are expected to have the
right to choose their core superannuation fund.
The association said the big retail funds will be hardest hit as
people, given the right to move their compulsory superannuation,
start to look around for better rates of return.
It found while retail funds had a higher proportion of members
who might be tempted to move, retail and industry funds will
benefit from the closure of many corporate funds.
"While some of these movements will be between retail funds,
there is likely to be significant flows of assets into
self-managed super funds and to a lesser extent to industry
funds," it found.
"This will be balanced to some extent by inflows from previous
industry funds and corporate members, but these flows to retail
are likely to be dominated by lower account balance members.
"The higher account balance members of corporate and industry
funds are likely to end up in self-managed super funds."
Retail funds account for 34.4 per cent of all super assets.
The association report estimates up to 14 per cent of assets
held by retail funds may be shifted, largely to self-managed
funds.
The association estimates there are hundreds of small corporate
super funds, some with total assets of less than $1 million.
With new laws coming into operation, the 1,334 funds with assets
less than $20 million will go.
The association expects the number of funds with assets of
between $10 billion and $20 billion to climb from one to three.
The total number of super funds will drop from 1,978 to just
355.
"There will be a significant flow out from corporate funds, and
no flow ins," it found.
©AAP 2005
• National Nine News - 15:31 AEDT
Wed Feb 2 2005
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