Super changes give SMSF trustees jitters
Changes to superannuation proposed in the 2016 Federal Budget appears to have shaken confidence in the self-managed superannuation sector, which recorded the lowest level of contributions for a June quarter since 2012, according to a survey.
AMP SMSF business, SuperConcepts, released the SMSF Investment Pattern Survey, which showed average contributions to an SMSF declined by 38 per cent from the June quarter in 2015 to the June quarter in 2016.
SuperConcepts executive manager, technical and strategic solutions, Phil La Greca, said the lowest contribution levels were despite higher concessional caps compared to last year and the superannuation guarantee levels at 9.5 per cent instead of nine per cent.
"There's obviously the uncertainty of these measures that's had a major impact on that," he said.
"We are still in a position where funds are now paying more out than they are seeing contributions. That's pretty much to be expected because of the ageing demographic.
"We have more people in pension drawing more than contributions flowing in so the growth of the sector, shall we say, has been driven more by more by investment performance in terms of dollars as distinct from the number of funds," La Greca said.
La Greca said average contributions to SMSFs dipped over the financial year, particularly in December, March and June quarters, compared to previous corresponding years.
Contributions slid from $17,320 in the June quarter 2015 to $10,748 in June quarter 2016.
While many SMSF trustees attained some form of advice through a planner or an accountant, there were a large number of trustees who were possible out on their own.
"That's part of the big issue. Do they actually understand what the changes are, do they understand the consequences?" La Greca asked.
Recommended for you
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
Morningstar is going to offer research ratings of funds in the $3.5 trillion superannuation sector for the first time in response to demand from financial advisers.
Treasurer Jim Chalmers has opened a consultation into the design of the annual superannuation performance test, canvassing views on a range of reform options.
