Contribution caps key for superannuation roundtable: SPAA
The issue of higher concessional contributions caps for individuals aged over 50 and who have less than $500,000 in superannuation will be a key issue at the Government's recently-announced superannuation roundtable, according to the Self-Managed Super Fund Professionals' Association of Australia (SPAA).
SPAA said that individuals trying to save for retirement will need continued support by way of tax concessions as an incentive to save, in line with the Government's own stated policy objective of reducing reliance on the age pension and promoting self-funded retirement.
The halving of the caps for those under 50 to $25,000 in the 2009 budget is denying many individuals, particularly those close to retirement, the opportunity of adequately saving for their retirement, SPAA said.
"There's a need for individuals to be able to make catch-up contributions later in life, an opportunity which is currently denied by the current low level of concessional contribution caps," said SPAA chief executive Andrea Slattery.
"The administrative cost and complexity of introducing the proposed $500,000 balance threshold for those aged 50 plus, versus a standard increase in contribution caps, far outweighs the benefits for the industry and all individuals, which is contrary to the Government's objectives to improve the efficiency of the superannuation system," she said.
SPAA again called for a $35,000 concessional contribution cap for all individuals over 50 and then increasing in incremental amounts to a minimum $50,000 as soon as is fiscally possible in its 2012 budget submission.
"In many ways, this will avoid many complexities associated with the proposed $500,000 threshold regime. This would also continue to offer a fairer system for those nearing retirement to maximise the value of their retirement savings and reduce any reliance on the age pension system," Slattery said.
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