AMP transfers 25% of accounts to ATO

AMP executive Alex Wade has told a parliamentary inquiry that the company has transferred a quarter of its superannuation fund account to the Australian Taxation Office.

Wade said these accounts were inactive, and AMP felt that transferring them to the ATO - as opposed to a rollover account - was the appropriate course of action.

"All of our low balance accounts have been transferred to the ATO; over 550,000 accounts, which is about 25% of our client base," Wade said.

"We supported the legislative measures to reduce duplicated accounts and we felt the right approach was to transfer them to the ATO."

The House of Representatives Standing Committee on Economics has been grilling superannuation funds over the practice of transferring "zombie accounts" to rollover fund AUSfund.

"Personally, I believe in the spirit of the law, transferring them to the ATO was the right thing to do," Wade said.

AUSfund is an Eligible Rollover Fund (ERF) with the purpose to be a temporary repository for amounts transferred from other regulated superannuation funds.

Committee chair, Tim Wilson MP, labelled the practice "suspicious" given the rollover fund charges a fee, while the ATO does not.

Rainmaker research shows that for an account balance of $5000, the fee will be around $42.

Wilson expressed his concern for the $800 million that has been transferred to AUSfund since the implementation of the Protecting Your Super laws, saying the funds are at risk of being further eroded by fees.

However, Industry Super Australia deputy chief executive Matthew Linden told the committee returns earned on money in the ERF outweighed the fees.

Read more: ATORollover FundAlex WadeAustralian Taxation OfficeIndustry Super AustraliaTim Wilson MPMatthew Linden
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