Super funds will shun home savers

MOST not-for-profit super funds are unlikely to offer First Home Saver Accounts because they will be too hard and expensive to run.

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Super funds will shun home savers

MOST not-for-profit superannuation funds are unlikely to offer First Home Saver Accounts because they will be too difficult and expensive to run, new research has found.

A survey of 45 of some of the country's largest super funds found the proposed structure and costs of setting up these special savings accounts was considered too great.

Less than one in four not-for-profit super funds -- including corporate, public offer and industry funds -- said they would offer the accounts to members, the survey found.

The logistics and expense of running a separate trust for first home saver accounts was considered  "insurmountable'' by most.

The Federal Government is establishing First Home Saver Accounts to help people save to buy a home. The accounts will receive favourable tax treatment and co-contributions from the Government.

"It appears that many super funds have put the first home saver account in the too hard basket,'' Australian Institute of Superannuation Trustees chief executive Fiona Reynolds said.

"These products are welcome but under the proposed legislation the costs of establishing and running a First Home Saver Account are simply too high for many super funds,'' Ms Reynolds said.

The release of the survey coincidedwith the introduction of the Bill in Federal Parliament yesterday.
In its submission to the Federal Government about the First Home Saver Accounts the super lobby group argued that a separate trust structure for the accounts would not work.

The special accounts will appear in October 2008, after the original start date of July was pushed back by the Government in the May 2008 Budget.