SISFA questions pause in cap superannuation indexing
Small Independent Superannuation Funds Association (SISFA) has questioned the Government's recent decision to pause indexation of the superannuation concessional contributions caps in 2013-2014.
The Government said the move will provide savings of $485 million, but SISFA expressed concern that cuts such as this could become self-fulfilling for those Australians who do not have enough superannuation for a comfortable retirement.
"If the Government can 'pause' indexation now, what is to stop a future Government from again 'pausing' indexation or even 'freezing' indexation in the interests of balancing some other budget need?" asked SISFA chair Michael Lorimer.
Such pauses outside superannuation guarantee issues may become too tempting for future governments seeking to limit revenue loss when they have budget or surplus issues to consider, he said.
"SISFA calls for a sensitive and permanent solution for those under-resourced superannuation accounts for people who are now counting on catching up on their superannuation with growing concessional caps. SISFA asks the Government to stay consistent," he said.
The knock-on effect of concessional cap changes is that non-concessional caps are also assumed to be 'paused' regarding indexation, according to SISFA.
SISFA also questioned why the treatment of non-concessional contributions not mentioned in the announcement where the Government outlined the changes.
Non-concessional contributions should have risen from $150,000 per year to $180,000 per year for up to three years and a total non-concessional contribution cap from $450,000 to $540,000, according to SISFA.
Recommended for you
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
The second tranche of DBFO reforms has received strong support from superannuation funds and insurers, with a new class of advisers aimed to support Australians with their retirement planning.
The financial services technology firm has officially launched its digital advice and education solution for superannuation funds and other industry players.
