The SMSF Association welcomes many elements of the Government’s first tranche of superannuation reforms, believing it will give the system a much-needed confidence boost and provide greater flexibility, fairness and enhanced opportunity for people to be self-sufficient in retirement.
The Association was responding to the Federal Government’s announcement today that is part of its ongoing process to bed down the superannuation changes Treasurer Scott Morrison announced in the May Budget.
SMSF Association Managing Director/CEO Andrea Slattery says the Government is to be commended for many of these changes, all of which the Association has strongly advocated.
“We have been firm supporters of LISTO (Low Income Superannuation Tax Offset), deductible contributions, removing the work test for over 65s, and spouse contribution changes.
“All these measures will give superannuation greater certainty and flexibility, particularly for women and those who have had broken work patterns or variable incomes during their working lives.
“Additionally, implementing the proposed carry forward of unused concessional contributions caps and providing extra contribution cap space above $25,000 per year for people aged 50 and over would further support these changes.”
Slattery says the Association is concerned that in relation to the proposed draft objective for superannuation it does not encompass the notion of adequacy.
“We support the idea of superannuation being to supplement or substitute the age pension, but believe it should also aim to provide people a secure and dignified retirement through an adequate level of retirement savings.
“It has been our long-held position that in any definition of the objective of superannuation that adequacy must be included. Although we were broadly supportive of the thrust of the Financial System Inquiry recommendations, we believed that on this issue it should have included adequacy as an integral part of its definition of the objective of superannuation.
“We will continue to consult with the Government on this issue to have adequacy included in the definition and the supporting principles.”
Slattery says that in the wake of the May Budget and the election there has been much uncertainty around the superannuation system, and the Government’s announcement today should go “some way” to instilling confidence back into the system.
“We are certainly looking forward to working with the Government to bed down some of these important reforms, and will continue to consult on those issues where there remain areas of difference,” she says.
