SISFA would like to thank the Minister for adopting many of the superannuation measures detailed in our earlier submission of 5 February 2016
SISFA welcomes the announcement of key measures in the Treasurer’s Budget speech of 3 May 2016 that were an integral part of our submission in September 2011 to the Minister for Financial Services & Superannuation.
In particular, SISFA has long advocated the removal of the ‘10% rule’ for self employed superannuation concessional contributions, the removal of an arbitrary age limit restriction regarding the capacity to make super contributions and the introduction of a ‘rolling period’ concessional contributions cap mechanism whereby contributions can be caught-up in future years. SISFA continues to advocate that there should be an unlimited period for such concessional contributions ‘catch-up’ procedures given the increasing itinerant nature of the workforce, however we commend the Minister for introducing at least a five year window as an important step in this policy direction.
However, SISFA is concerned about the setting of the $1.6M cap for retirement income provision for all retirees and the level of additional complexity that is being introduced for existing self-funded retirees in particular. If this policy objective is to be applied to all retirees, then as a minimum SISFA advocates allowing members of a couple to be able to split accumulated benefits prior to the introduction of such a retirement income cap at 1 July 2017.
This would extend the current principle of super contributions splitting further and allow existing pensioners the opportunity to re-organise their existing super balances if required given the changes announced. In effect, it would place existing pensioners in the same position as others approaching retirement who now have the ability to plan their future with the new rules in mind. Without such a concession, existing retirees are being penalised for having accumulated existing retirement assets in the name of the principle wage earner – a situation typical of the current retiree demographic.
SISFA also advocates making any change to the non-contribution caps be a forward looking measure that takes effect from 1 July (not Budget night). This would minimise administrative complexity and cost while ensuring existing contribution plans can be implemented under current laws by 30 June 2017 or at least 30 June 2016.
All of the proposed Budget night changes present challenges to the entire industry from an administration, technology and advice perspective (and hence impose extra costs). Accordingly, SISFA will be seeking further clarification on a range of issues surrounding the operation of the new contribution caps and retirement income measures and looks forward to discussing these matters further with Treasury to ensure that they can be implemented effectively and with due sensitivity for many long-held retirement plans.
SISFA continues to work tirelessly in advocating for SMSFs and their members and welcomes the opportunity to continue the consultation process with Government on all measures affecting our stakeholders as announced by the Treasurer.
Media enquiries:
Mike Goodall
SISFA MD
+61 419 200 919
Chris Balalovski
SISFA Chair
0417528784