Superannuation Alert - 22.07.15
Financial Services eBulletin - 22 July 2015
The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.
On 13 July 2015, the Climate Institute (Institute) made available a discussion paper titled 'Australia's Financial System and Climate Risk' (Discussion Paper). The Discussion Paper notes that the Australian financial sector is heavily exposed to climate risk and that the sources of this risk are the high exposure to carbon intensive assets; high concentration of assets in residential property and mortgage debt; and shortage of low carbon assets. In relation to the superannuation industry, the Institute notes that Australia has a relatively large pool of pension assets that are invested heavily in equities, and given the carbon intensive nature of Australia's economy, the pension assets are exposed to higher carbon risks than the international mean. The Discussion Paper recommends that the Australian financial regulators conduct an in depth review of the risks and factors identified in order to understand the nature of climate risk and how to best manage it.
On 15 July 2015, the Federal Treasurer, Joe Hockey, gave a speech which addressed the Government's response to the Tax White Paper (Paper). Mr Hockey underlined the need for stability in superannuation law. In relation to superannuation tax concessions, the Treasurer stated that the Government "will not engage adverse or unexpected changes to superannuation in [their] first term of government. Nor do [they] have plans to increase superannuation taxes into the future."
On 17 July 2015, the ATO published a reminder that from 1 July 2015, a legislated rise in the preservation age came into effect. The change applies to all individuals born after 30 June 1960; the new preservation age is currently 56 years. As a result of this change, a member who turns 55 between July 1 2015 and 30 June 2016 cannot start a transition to retirement income stream during the 2015-16 financial year. The preservation age will continue to rise until it reaches 60 in the 2024-25 financial year.
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