The number of superannuation members making voluntary contributions has risen ahead of reforms to the super legislation that come in to effect in July 2017, according to Colonial First State (CFS).
Voluntary contributions to FirstChoice Super rose sharply in November, up 25 per cent on contributions made in October, the company said, with contributions made to FirstChoice across November and December also up 35 per cent on the previous two months.
CFS general manager of product and investments Peter Chun said the rise in voluntary contributions coincides with the passing of the federal government’s super reforms, which will see a reduction in the annual non-concessional contribution cap, from $180,000 to $100,000, for people with a total super balance of less than $1.6 million.
“These are the largest changes to Australia’s super system in almost a decade and this spike in voluntary contributions reflects not only more confidence in the system, but a sentiment to act early and take advantage of this window before the new rules take effect,” Mr Chun said.
“We expect to see further increases in contributions as the June 2017 deadline approaches.”
CFS noted that those with total superannuation balances of $1.6 million or more on 30 June 2017 will also no longer be able to make non-concessional contributions in the 2017-18 financial year.