2 December 2016

Do-it-yourself superannuation, in one form or another, has been around for about 30 years. But it has only been over the last few years that SMSFs have made an indelible mark on Australia’s retirement savings landscape.

The SMSF sector now claims a bigger slice of the super pie than it ever has, in terms of asset values and number of funds. The close to 600,000 SMSFs in the country have an average balance that is generally in excess of $1 million. With more than $594 billion of superannuation assets, SMSFs represent roughly a third of Australia’s total.

This stunning data is contained in the ATO’s statistical report on SMSFs up to the end of December 2015, released in February 2016, so the above figures have only improved since then.

By asset value, SMSFs have now surpassed retail and industry super funds. The regulator of superannuation, the Australian Prudential Regulation Authority (APRA), says retail funds account for around 29% of total superannuation assets, industry funds about 24%, but that SMSFs accounted for the biggest slice – more than 32%.

Continue reading “Is an SMSF right for you?” →

15 October 2016

The new Parliament has released the first batch of proposed changes to the superannuation regime, and among these was the announcement that the proposed $500,000 lifetime non-concessional cap is to be scrapped.   Recall that these measures were previously announced in the Federal Budget earlier this year before the election.

These proposed changes are still in exposure draft form and may be subject to further tweaking.

The government also revealed that:

• the non-concessional contributions cap is going to be $100,000 per year, starting from July 1, 2017 (instead of the current $180,000 cap)
• taxpayers with a superannuation balance of more than $1.6 million will no longer be eligible to make non-concessional contributions from the same date.

Also, some of the previously announced measures will not proceed, and have been postponed or abandoned altogether. These include:

• commencement of catch-up contributions using the unused caps from the prior five years for people with balances of $500,000 or less is postponed and to start from July 1, 2018
• harmonisation of acceptance of contribution rules for those aged 65 to 74 will not proceed at all.

The proposed rules that remain intact and will continue:

• the rule allowing fund members to “bring forward” three years’ worth of non-concessional contributions for individuals aged under 65, and
• the requirement to meet the “work test” for individuals over the age of 65 in order to make non-concessional contributions.

Continue reading “Controversial super change scrapped — but other proposals need to be watched” →