Industry superannuation funds have weighed into the excess contributions caps issue, warning members of the dangers of breaching their concessional limits in the current financial year.
Australian Institute of Superannuation Trustees (AIST) chief executive Fiona Reynolds (pictured) said the risk of exceeding the concessional cap had grown since the ‘before tax’ concessional caps were halved from July 2009, because many people were unaware of the changes.
“It’s been estimated that more than 100,000 Australians – many of them unsuspecting – have breached their cap limits in the past few years,” she said. “While there is no doubting the benefit of topping-up your super to ensure a better retirement outcome, there is also no doubting that breaching your cap limit can be an expensive mistake.”
Reynolds said the AIST was urging the Government to provide greater flexibility in the coming Federal Budget for those who made voluntary concessional contributions to superannuation.
“One of AIST’s recommendations is that the so-called ‘bring forward’ rule that currently applies to after-tax ‘non-concessional’ caps should be similarly applied to ‘concessional caps’,” Reynolds said.
She said such a measure would have the dual benefit of providing more flexibility around the caps while also protecting people who might inadvertently breach their cap in any one year.
“It brings simplicity and makes the rules consistent across concession and non-concessional contributions,” Reynolds said.
