SMSF benefit payments rise ahead of super changes
The average benefit payment for self-managed superannuation fund (SMSF) trustees increased significantly from $16,256 to $27,900 during the March quarter, according to SuperConcepts.
SuperConcepts’ SMSF Investment Patterns Survey said this increase was off the back of SMSF trustees who looked to take advantage of the current rules around non-concessional caps.
The overall contribution levels continued to rise in Q1 from $8,548 to $9,138, which continued the trend from Q4 2016 which saw contributions increase by 181 per cent following the Government’s confirmation that the proposed super changes would come into effect on 1 July 2017.
SuperConcepts said this rise was a reversal of the historical trend where Q1 was the lowest quarter each year.
SuperConcepts executive manager technical and strategic solutions, Phil La Greca, said trustees were implementing withdraw and re-contribution strategies to take advantage of the window of opportunity before the changes.
“Strategies include making non-concessional contributions into an accumulation account, starting a new 100 per cent tax-free pension and making contributions to a spouse to try and equalise member balances and maximise access to the $1.6 million pension transfer balance cap for both persons,” he said.
The survey said in prior quarters the split lump sum withdrawals versus pension payments tended to be around 20 per cent versus 80 per cent. In Q1 2017, the split shifted to 40 per cent versus 60 per cent.
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.