SUPERCentral News
In light of several cases that have interpreted the definition of ‘dependant’ very widely, it may be that a larger class of persons than previously thought might qualify to receive part of a deceased member’s entitlement from a super fund.
While the Government has the Henry Tax Review – the tax review headed by Dr Ken Henry, the Treasury Secretary, and which is reviewing all taxes and government benefit systems – the Opposition has established the “other Henry” review, headed by leading industry economist, Dr Henry Ergas.
Given the relatively stringent preconditions for amounts to be released from super under either the Severe Financial Hardship or Compassionate Grounds release conditions and given the limited amount which generally can be released the Government should consider introducing another release condition for natural disasters.
Another ground for early release of benefits is on the basis of compassionate grounds. This release condition is for self managed superannuation funds administered by APRA.
The ATO has finalised the Business Real Property ruling. Apart from the 370 paragraphs and 107 footnotes which comprise the Ruling, the Ruling is a good read.
Super fund members affected by the Victorian Bushfires or the North Queensland floods may be able to access part of their super via the Severe Financial Hardship release condition.
The current SG rate is 9%. However, a 9% contribution, even over a 40-year working life, may not produce sufficient capital to support a reasonable amount of income in retirement.
The Australian Financial Review has reported that “Superannuation Industry representatives” have expressed concerns to the new Super Supremo, Senator Nick Sherry, as to the width of the recently enacted gearing exception.
The Superannuation Minister, Senator Sherry, has indicated that one of his prime objectives is to reduce superannuation fees of retail and industry funds.
An alarming heading in a leading financial newspaper has appeared, which suggests that the inviolate status of tax free super benefits for post 60 year olds is under threat.
The Report of the Harmer Review (a review into the adequacy of government pensions and the current pension age) is due to be released in late February 2009. The Henry Tax Review report into retirement incomes is due to be released in March 2009.
Newspaper reports suggest that the Henry Tax Review is currently considering ways of boosting the level of voluntary super contributions. Since the beginning of the global financial crisis, voluntary super contributions have, for some retail and industry funds, halved.
Superannuation expert and well respected columnist Tony Negline has joined SUPERCentral on a consultancy basis to build our presence with the dealer groups.
It is important not to put pensions or death benefit nominations in place unless you’ve thought very carefully about all the estate planning ramifications. Don’t simply consider the narrow issues relating to the pension or the nomination but think carefully about the member’s entire estate plan so that these issues are dealt with holistically.
The Senator, again at the recent ASFA conference, advised that the SMSF segment (of the super industry) is a robust, important and most healthy area of the market.
This review aka the Henry Review and aka the Roots and Branch review of the Tax System is expected to provide its final report in December 2009.
A lost account is simply a super account in respect of which the trustees have lost contact with the member.
Currently, many industry funds invest in private equity and other non-listed investments. As these investments are not listed on any market (unlike most public company shares) they are not valued on a day to day basis and have not as yet been officially exposed to the impact of reduced economic expectations and negative forecasts.
Misreporting in SMSF income tax returns is a major problem. This is one of the conclusions drawn from a review of the 2006/07 and 2007/08 SMSF compliance programme conducted by the ATO.
The transfer of the account balance to a superannuation fund will be treated as a non-concessional contribution and will be counted against the non-concessional contribution cap. As a non-concessional contribution, the transferred amount will also form part of the tax-free component.