In its submission to Treasury on the Objective of Superannuation consultation paper, KPMG recommended the introduction of lifetime limits to the amount individuals can maintain with the superannuation system.
“KPMG recommends the introduction of limited exemptions from concessional and non-concessional capping arrangements to allow women and low-income earners to boost their superannuation contributions to compensate for broken employment patterns, changed family circumstances, including divorce and financial separation, and reduced contributions generally,” the submission also said.
KPMG has also recommended the government reduce the annual income threshold at which the 15 per cent tax rate applies to concessional super contributions.
Further, the firm has recommended the government reduce the existing annual non-concessional contribution cap from $180,000 and restrict the ability to bring forward three years’ worth of non-concessional contributions.
Overall, KPMG stated it supports the primary objective of the superannuation system as recommended by the Financial System Inquiry, and believes that clarity of purpose will “aid consistent policy delivery and ultimately efficiency”.
The FSI outlined the primary objective of superannuation as to provide income in retirement to substitute or supplement the age pension.
“We support the objective being legislated and recommend that the objective of superannuation would be best placed in the preamble of the Superannuation Industry (Supervision) Act 1993,” KPMG stated.
“The recommended objective of the superannuation system recognises that the focus of the system is changing. This refocusing on retirement incomes is entirely appropriate and much needed,” KPMG added.