Govt should restore concessional caps

On the eve of the Federal Budget, the Government remains under pressure to restore the concessional superannuation contribution caps to pre-2009 levels, with a survey revealing superannuation funds believe it erred badly and should make a priority of having them restored.

That is one of the key findings of the latest MetLife/Super Review survey conducted during the Conference of Major Superannuation Funds on the Gold Coast in late March.

The full results will be published in this month’s edition of Super Review.

Not only did 85 per cent of survey respondents agree that the Government should restore the concessional caps to their pre-existing levels, but more than 50 per cent of them said it should be one of the Gillard administration's priority policy issues, ranking just behind lifting the superannuation guarantee to 12 per cent.

The survey revealed that respondents were reasonably indifferent to the Government implementing the recommendations of the Cooper Review into superannuation but felt strongly about both lifting the superannuation guarantee and restoring the previous contribution caps.

In rank order, the most important issues for survey respondents were:

1. Lifting the superannuation guarantee to 12 per cent;

2. Restoring concessional contribution caps;

3. Introducing SuperStream; and

4. Introducing MySuper.

However, fewer than 20 per cent of respondents ranked MySuper as either a primary or secondary agenda item for the Government.

The latest survey findings endorse those of the corresponding time last year when respondents strongly agreed with the contention that Government meddling with superannuation policy had served to create unnecessary uncertainty in the minds of fund members.

There were suggestions in the run-up to the Federal Budget that the Government, while not dramatically altering direction on the concessional contribution caps, would introduce changes to eliminate unintended consequences around excess contributions.