Around 31 per cent of self-managed superannuation fund (SMSF) members will be affected by the super reforms, despite the Government’s figure that 96 per cent of super account holders would not be affected, according to Class.
Class’ latest SMSF benchmark report found during the past 33 months, 6.9 per cent of SMSF members 49 and over made non-concessional contributions of more than $300,000, compared to the Government’s figure that less than one per cent of super members made or planned to make the same contribution in a three-year period.
“The analysis clearly shows that for a significant percentage of SMSF members, the super reforms legislated in 2016 could throw a hefty spanner into their contributions strategy and overall wealth plan,” the report said.
The report found that 65-74 year olds would be hit the hardest as they could not access the bring-forward rule and that their annual cap had been reduced from $180,000 to 100,000 a year.
Class said 11.3 per cent of this age group contributed over $100,000 in FY2015, averaging $167,000 and if they had been scaled back to $100,000 this would have reduced overall contributions in that age group by 32.9 per cent.
The report said that 90 per cent of the reduction in concessional contributions would come from those 49 years and older.
Class chief executive, Kevin Bungard, said more Australians would need to carefully consider their retirement savings plans and whether they would be able to meet their goals under the new contributions caps.
“The average SMSF member is aged 58 and worked for 15 years before the superannuation guarantee was introduced, well over a third of their career,” he said.
“It’s no wonder that more than a quarter of those 49 and older took advantage of the higher caps to make catch up contributions. It will not be much harder for them to catch up for those lost years.”