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SYDNEY NSW 2000
ADELAIDE SA 5000
T + 61 9293 3700
T + 61 8 8205 1900
www.smsfassociation.com
www.ricewarner.com
Media Release
Research shows ‘strong argument’ to lift concessional cap
13 October 2016: The SMSF Association has produced compelling evidence that
the Federal Government should increase the concessional contribution cap for
people aged 50 and over and extend the carry forward of concessional contributions.
SMSF Association Managing Director/CEO Andrea Slattery says research
undertaken for the organisation by the actuarial consultancy firm Rice Warner
“conclusively shows” that people only begin making significant voluntary
contributions to superannuation from their mid-50s onwards.
“The research confirms what the Association has long been telling policy makers:
that there is a sharp difference between compulsory and voluntary contributions to
superannuation – the former increase gradually over time while the latter jump
dramatically in the years leading to retirement.
The Rice Warner research used a sample of 14,351 SMSF members provided to the
Association by BGL, a leading SMSF software provider.
Slattery says: “This research graphically shows why people aged 50 and over need
to have a more generous contribution cap than the $25,000 that will apply from 1 July
2017.
“The Association has argued for the Government to retain the current $35,000 cap
for older workers and notes that even a compromise of a $30,000 cap will still benefit
fund members trying to top up their superannuation as they near retirement.”
The research highlights the significant impact that voluntary contributions can have
on a fund member’s superannuation balance.
The research also highlights that if the carry forward concessional contribution limit
was increased from a balance of $500,000 to $750,000 it would benefit 13% of the
members in the sample, of which half would be female.
Slattery says: “The Association believes that this change would increase the
effectiveness of the Government’s carry forward policy and deliver better results for
people who have had volatile incomes throughout their careers and are trying to build
adequate retirement savings.
“These important policy changes will allow a greater opportunity for people to
achieve a secure and dignified retirement by building their retirement savings.
“It’s also significant that women’s contribution patterns show that when they are in
the workforce they are engaged with their superannuation, and this particularly
applies when they are in the 60-plus age group.”
Rice Warner CEO Michael Rice said the underlying focus of the research was to
measure the impact of recently proposed legislative changes to tax treatment in
superannuation on SMSF members and potential refinements.
“The three most significant of those proposed legislative changes were: the
introduction of a $1.6 million cap on the amount that can be transferred from
accumulation accounts to pension accounts, the reduction of the concessional
contribution cap to $25,000 from $35,000 and the introduction of a $100,000 yearly
non-concessional contributions cap (restricted to those with balances under
$500,000).
“The research shows that the proposed changes will have a material impact on the
SMSF population and will restrict members’ ability to save in superannuation.”
About the SMSF Association:
The SMSF Association is the authoritative voice for the self-managed superannuation fund
sector. The Association, which represents professionals providing a range of services across
various disciplines in the complex area of SMSFs as well as engaging trustees to become
better educated and informed. The SMSF Association is an advocate for the highest
professional standards and competence to ensure SMSF trustees always receive the best
possible advice.
About Rice Warner:
Rice Warner is a trusted partner to many successful organisations operating in Australia’s
dynamic financial services sector. Valued clients include superannuation funds, financial
institutions, fund managers, life insurers, administrators, financial planning licensees
and providers of financial software. Since 1987, our firm has built an unrivalled reputation for
providing fact-based guidance to industry participants, underpinned by a rich heritage of
independence and informed opinion leadership.
Contact for interviews:
Andrea Slattery
SMSF Association Managing Director/CEO
M: 0417 898 317
E: [email protected]
Michael Rice
Rice Warner CEO
02 9293 3704
Media
Nicholas Way
Shed Media
M: 0409 585 979
E: [email protected]