Mercer warns on 'gaming' around excess contributions
The Federal Government has been warned that its proposals to restrict additional concessional contributions to those aged over 50 on superannuation balances of less than $500,000 risks increasing costs and complexity at the same time as encouraging efforts to find ways around the system.
The warning came from Mercer, with its Australian managing director and market leader, David Anderson, saying the proposed regime, announced by the Government in response to the Henry Tax Review, would encourage “some gaming of the system”.
Anderson said gaming of the system might equate to contribution splitting or deferring contributions when the Government’s goal ought to have been making superannuation simpler and fairer.
However, he said Mercer broadly supported the Government’s proposals with respect to superannuation and, in particular, the move to increase the superannuation guarantee from the current 9 per cent to 12 per cent.
Anderson said that, among other things, the move would increase the adequacy of retirement savings and reduce the overall cost of government support.
AUTHOR
Mike Taylor
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