Industry funds urge flexibility on excess contributions
Industry superannuation funds have weighed into the excess contributions caps issue, warning members of the dangers of breaching their concessional limits in the current financial year.
Australian Institute of Superannuation Trustees (AIST) chief executive Fiona Reynolds (pictured) said the risk of exceeding the concessional cap had grown since the ‘before tax’ concessional caps were halved from July 2009, because many people were unaware of the changes.
“It’s been estimated that more than 100,000 Australians – many of them unsuspecting – have breached their cap limits in the past few years,” she said. “While there is no doubting the benefit of topping-up your super to ensure a better retirement outcome, there is also no doubting that breaching your cap limit can be an expensive mistake.”
Reynolds said the AIST was urging the Government to provide greater flexibility in the coming Federal Budget for those who made voluntary concessional contributions to superannuation.
“One of AIST’s recommendations is that the so-called ‘bring forward’ rule that currently applies to after-tax ‘non-concessional’ caps should be similarly applied to ‘concessional caps’,” Reynolds said.
She said such a measure would have the dual benefit of providing more flexibility around the caps while also protecting people who might inadvertently breach their cap in any one year.
“It brings simplicity and makes the rules consistent across concession and non-concessional contributions,” Reynolds said.
AUTHOR
Mike Taylor
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
