After conducting an analysis of the proposed budget changes based on anonymous data from 1,200 administration firms representing 60,000 SMSFs, BGL has predicted the budget changes could affect 85,000 SMSFs or 160,000 SMSF members.
Based on the data, the proposed $1.6 million pension cap, BGL said, will affect at least 15 per cent of SMSFs, which is significantly higher than the 4 per cent figure suggested in the budget.
“However, Labor’s proposal of $75,000 tax-free income for pension accounts is significantly more onerous,” said BGL.
Based on the average returns of SMSFs from 2010 to 2014, BGL said this equates to a cap of $1.1 million and will affect at least 136,000 funds or 24 per cent of all SMSFs.
BGL believes rhe proposed lifetime cap of $500,000 for non-concessional contributions will affect at least 10 per cent of SMSFs or 56,000 funds with 106,000 members at 30 September 2015.
The amount of non-concessional contributions a fund has made is still difficult to calculate, because the data has often not been available or provided to superannuation administrators, BGL said.
The SMSF software provider also said the reductions of concessional contributions to just $25,000 and the lifetime cap on non-concessional contributions will make it difficult for anyone to build a superannuation balance that will provide sufficient retirement income.
BGL Corporate Solutions chief executive Ron Lesh said he has seen a lot of anger directed at the “ridiculous impractical superannuation policies from both sides of politics”.
“Many people are disillusioned with their superannuation. They feel the proposed superannuation policies of all the major parties are simply unfair to people who have worked all their lives to build retirement savings,” said Mr Lesh.
“They are bad for SMSFs, highly retrospective and in my view bad for Australia’s future.”
Read more:
ASIC flags SMSF investors in scam risk
“Dreadful” is an accurate, though rather kind description of the policy Terry. An act of desperation would perhaps be even more accurate.
Governments addicted to spending consistently over-estimate income projections in an attempt to make their budget numbers look less awful. Accounting 101 tells you that’s just plain stupid, but they never learn from their mistakes and now the chickens have come home to roost – all $37b of them!
Superannuation savings are the veritable pot of gold they can’t wait to get their grubby little hands on in an effort to balance the books. A perceived “easy sell” because only “rich” people have superannuation savings, don’t they!
Even more galling when the policy is drafted by politicians and public servants in taxpayer funded pension funds which, again, will remain largely unaffected by the changes.
I could say thank you to the Government and Opposition for wanting to send me clients looking for legal wealth accumulation strategies but I must confess it seems dreadful policy to attack a pool of national savings in this way. Do they want to drive investment offshore or deeper into land speculation?
I wonder if the changes will affect, Turnbull’s money in an offshore fund?