Whichever party forms Government must consult

IOOF government election federal parliament

5 July 2016
| By Mike |
image
image
expand image

New analysis issued by IOOF has revealed the degree to which the financial services industry has been left in a policy no-man's land by announced Federal Budget changes, which now have a highly uncertain future due to the looming make-up of the new Federal Parliament.

IOOF Senior Technical Services manager, Martin Breckon, said the financial services industry and particularly financial planners were looking for clarity and certainty but the objective might prove unattainable irrespective of which party eventually formed Government.

He pointed to the fact that establishing the core purpose of superannuation remained up in the air, while there needed to be a good deal more consultation around transition to retirement pensions and the non-concessional contribution caps.

"The May 2016 Budget announcements outlined that investment earnings on transition to retirement pensions will be taxed. It seems reasonable that we then need to consider the broader issues like the flow-on impacts for anticipated fund reporting requirements; whether this means a new form of benefit payment (and hence tax) within the accumulation division in the fund; and whether there would be any type of grandfathering?" Breckon said.

"The $500,000 non-concessional contribution cap lifetime limit also presents certain issues concerning their retrospective treatment (looking back to contributions made since 2007). Furthermore, the subsequent exemptions given for certain small funds being partially through the completion of an LRBA [limited recourse borrowing arrangement] transaction, creates additional complexity. How for instance we might recognise these exempted amounts on a rollover when a small fund closes?"

Breckon said that it was in these circumstances that it was critical that whichever party formed Government in coming weeks, it consulted widely and constructively with the industry to ensure clarity of purpose is achieved.

"Superannuation funds and financial advisers have serious obligations to fulfil to their members and clients," he said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Interesting. Would be good to know the details of the StrategyOne deal....

3 days 16 hours ago

It’s astonishing to see the FAAA now pushing for more advisers by courting "career changers" and international recruits,...

3 weeks 1 day ago

increased professionalism within the industry - shouldn't that say, FAR register almost halving in the last 24 months he...

4 weeks 1 day ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

2 weeks 3 days ago

A former Brisbane financial adviser has been charged with 26 counts of dishonest conduct regarding a failure to disclose he would receive substantial commission payments ...

2 days 14 hours ago

Pinnacle Investment Management has announced it will acquire strategic interests in two international fund managers for $142 million....

1 day 17 hours ago