‘Wealthy bleaters’ lose out
Some "wealthy bleaters" who have been prolific in voicing their opinion over the last three months on superannuation will ironically lose out thanks to the latest super changes, according to Rice Warner.
An analysis by the research house found that the wealthy would have been better off under the original super proposals outlined in the Budget.
The analysis said:
- Members with balances larger than $1.6 million would no longer be able to make any non-concessional contributions. Those who had not exceeded the $500,000 non-concessional cap would have been able to make further contributions under the original proposals;
- The government was going to allow those over 65 to make non-concessional contributions (as long as they remained below the lifetime limit of $500,000). This has now been restricted to those who were still working between 65 and 74; and
- Those who had retired but made concessional contributions out of investment earnings would also have to stop these payments at age 65. Previously, they could have made a further $25,000 of concessional contributions for 10 more years.
"Overall, these groups represent only a small fraction of the superannuation population. For the majority of members, interaction with super will be business as usual and they will wonder what the fuss is all about," the analysis said.
Rice Warner noted the winners would include younger superannuants or those with smaller balances wishing to accumulate significant tax-concessional retirement savings as they would find it easier to reach the $1.6 million cap.
"Members who have already made more than $500,000 in non-concessional contributions since 2007 but have less than $1.6 million in their superannuation account will also be better off," it said.
"They can continue to make post-tax contributions to their superannuation account."
Recommended for you
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.
The ETF provider has flagged a number of developments as it formally enters the superannuation space through a major acquisition.
While all MySuper products successfully passed the latest performance test, trustee-directed products encountered difficulties.
