Super news for June 2025

AMP has launched a deferred innovative retirement income stream (IRIS) called AMP Super Lifetime. It is similar to the MyNorth Lifetime Retirement Income product already available on its wrap.

Because it is an IRIS, only 60% of the purchase amount is included in the assets test for the Age Pension. In addition, once the feature is activated within a member’s super account, instead of using a member’s investment earnings to calculate purchase price, Centrelink will use the deeming rate (currently at 2.25%) to deem the investment earnings.

The deeming rate is usually lower than actual earnings, especially over the long term, meaning the amount for the final assets test is also lower, providing another benefit in terms of accessing a higher Age Pension. 

AMP estimates an increase in Centrelink entitlements and retirement income of $100,000 in the first ten years of retirement from using the product.

“This is a breakthrough innovation for the superannuation industry and, most importantly, our members – a simple, no-cost feature that can significantly increase retirement income and improve access to the Age Pension,” AMP group executive, superannuation and investments, Melinda Howes said.

“It’s designed to quietly work in the background, using government rules to unlock more income when it matters most,” she added.

Call for Labor to rethink Div 296 proposal

If left unchanged, the Labor government’s proposals for the Div 296 tax on super earnings on balances above $3 million has the potential to impact more than 500,000 current Australian workers by the time they retire, according to new analysis by the Financial Services Council (FSC).

The FSC looked at different proposals for the tax and found that a $2 million threshold with indexation would impact more than 200,000 Australians currently in the workforce. A $2 million unindexed threshold would hurt the most Australians at $1.8 million, and a $3 million threshold with indexation would impact the least Australians at 64,000.

While recognising the merit in ensuring the superannuation system remains fair and fiscally sustainable, chief executive office of the FSC, Blake Briggs said the government’s current approach risks undermining consumer confidence in Australia’s retirement system by changing the goal posts on current and future retirees.

“The FSC encourages the government to consult on options that would not unfairly target future generations of Australian super consumers and undermine confidence in our retirement system by introducing a new, contentious tax on unrealised capital gains,” he said.

Older Australians overrepresented in crypto ATM scams

Older Australians aged between 60 and 70 are some of the most prolific users of crypto ATMs in Australia, according to observations by the AUSTRAC taskforce.

“It is a huge concern that people in this demographic are overrepresented as customers using cash to purchase cryptocurrency and, as evidence suggests, that a large number of 60 to 70-year-old users are victims of scam activity,” AUSTRAC chief executive officer, Brendan Thomas said.

The task force found that most crypto ATM users are over 50 years of age and account for almost 72% of all transactions by value. The 60 to 70-year-old cohort alone accounted for 29% of all transactions by value. 

“As part of AUSTRAC’s work to protect the financial system from criminal abuse, we’ve placed a number of conditions on crypto ATM operators, including a $5,000 limit on cash deposits and withdrawals, enhanced customer due diligence obligations, mandatory scam warnings, and requirements for more robust transaction monitoring,” Thomas said.

ASIC sues Australian Unity

The Australian Securities and Investments Commission (ASIC) is suing Australian Unity Funds Management Limited (Australian Unity) based on allegations it failed to ensure retail investors were in the target market for one of its investment products.

ASIC alleges Australian Unity failed to take reasonable steps to ensure retail investors were in the target market in three target market determinations it made for its Select Income Fund between 5 October 2021 and 5 October 2023.

During this period, prospective investors received a questionnaire to determine whether a potential ‘non-advised’ investor was within the fund’s defined target market. But for the first half of the period, the questionnaire was only provided to online applicants, and Australian Unity did not use the answers to screen prospective investors until 6 October 2023, despite issuing interests in the fund throughout this period.

“The design and distribution obligations are there to help make sure consumers get appropriate financial products aligned with their objectives, financial situation and needs,” ASIC deputy chair Sarah Court said.

“Issuers do not meet these obligations just by issuing a questionnaire. They need to actively review investor responses and assess there is nothing in those responses that is inconsistent with the defined target market for the product.”

Super assets fall in March quarter

Total Australian superannuation assets fell 0.8% to $4.1 trillion in the three months to March 2025, as investment markets plunged in response to Donald Trump’s initial tariff announcements. Over the year, total super assets were up by 5.9%.

Contributions increased by 14.4% to $202.8 billion in the year ending March 2025. Of this, employer contributions increased by 10.3% over the year to $147.1 billion and member contributions increased by 26.9% over the year to $55.7 billion.

Total SMSF assets fell slightly from $1,017.8 billion at the end of December 2024 to $1,005.5 billion at the end of March. Over the year, SMSF assets rose by 2.7% but SMSFs still account for around a quarter of total superannuation assets.