Speaking at an event in Sydney, HLB Mann Judd partner of wealth management, superannuation, Michael Hutton said the firm has already tested the process of obtaining records from the ATO for a client’s contributions history.
This may be necessary for clients who need to track their non-concessional contributions, for example, given the proposed lifetime cap of $500,000.
“We were on the phone for 20 minutes and their record was $195,000 different to what our records were, and that was after 20 minutes,” said Mr Hutton.
“We [also] asked the tax office for a written confirmation of their records and they wouldn’t give us a written confirmation. There are potentially a couple of million people that are going to need to access these records.”
Keeping track of records will be a significant issue with any of the main budget changes for superannuation, he said, especially for individuals who have multiple superannuation funds.
HLB Mann Judd director of superannuation Andrew Yee said the proposals will add further complexity to the system and bring it back towards the old reasonable benefit limit (RBL) system.
“With the RBL system, you couldn’t have a lot of money in super because the ATO was testing that,” he said.
“The reason the RBL system was removed was because it just got too complicated and the ATO’s systems just couldn’t keep up.”
Mr Yee said SMSF practitioners and SMSF trustees will need to have their software and technology will updated in order to keep up with the various proposals, which include the $1.6 million pension cap, the $500,000 non-concessional contribution cap and the $500,000 cap for unused concessional contributions.
“I think it’s just going to be an admin nightmare for anyone administrating super from now on.”
Read more:
Lenders still ‘dialling down’ on LRBAs
Reckon teams up with big four bank
Research shows super changes could hit govt’s election campaign
