The SMSF Association welcomes the Government’s proposed changes to their non-concessional contribution (NCC) lifetime cap policy, believing they represent very positive and sensible policy that will reduce administrative complexity and increase opportunities for adequate retirement savings.
SMSF Association Managing Director/CEO Andrea Slattery was responding to the Government’s statement today that it is amending its super package by replacing the $500,000 lifetime NCC cap with a new measure that reduces the annual NCC cap from $180,000 to $100,000 up to a superannuation balance of $1.6 million.
She says an annual cap of $100,000, with a three-year bring-forward of up to $300,000, will give people a better opportunity to save an adequate superannuation balance for retirement than that afforded by the lifetime cap.
“The move to cap NCCs to people who have super balances under $1.6 million is an appropriate compromise in light of the original proposal outlined in the 2016 Budget, with the policy goal of making the system more sustainable and better targeted still intact.
“In addition, the new proposal’s prospective application date is a welcomed move, removing the lifetime cap’s issue of counting contributions back to 1 July 2007.”
Slattery says the Association will work with the Government to ensure that the deferral of the ability to carry forward contribution caps made to offset the loss of revenue from the NCC cap shift can still be implemented by 1 July 2018.
“The Association has been a long-time advocate of allowing the carry-forward of concessional contribution caps because they assist women and people with broken work patterns achieve adequacy.
“We believe that this change was a positive element in the 2016 Budget package as they increased the flexibility of the superannuation system and allowed further opportunity for people to make catch-up contributions closer to retirement.”
About the SMSF Association:
The SMSF Association is the authoritative voice for the self-managed superannuation fund sector. The Association, which represents professionals providing a range of services across various disciplines in the complex area of SMSFs as well as engaging trustees to become better educated and informed. The SMSF Association is an advocate for the highest professional standards and competence to ensure SMSF trustees always receive the best possible advice.
Contact for interviews:
SMSF Association Managing Director/CEO
M: 0417 898 317
M: 0409 585 979