Individuals who are 50 years old or over with a superannuation asset balance greater than $500,000 should look to take advantage of the existing $50,000 concessional contributions cap now in order to maximise their retirement savings, according to OnePath head of technical services Graeme Colley.
“This is the last chance to make a $50,000 concessional contribution to superannuation and it’s a strategy we should be talking to people about now, because it gives them the opportunity if they want to implement a salary sacrifice arrangement up to that $50,000 for the last time where they’ve got more than $500,000 in super,” Colley said.
He said individuals should be addressing this situation now even though the government was yet to finalise the details as to how the new rules, such as the $500,000 limit, would be enforced.
The industry is expecting an announcement to be made on this subject in September or October.
While the government is still deliberating on the matter, Colley said he held out some hope it might abandon the suggested parameters.
“We would hope the $500,000 cap is abandoned and the government may then adopt a lower concessional contribution amount, which would keep the same simplicity in making contributions to superannuation without the additional recording of those amounts that will be required,” he said.
Having to keep track of contributions from 1 July 2011 onwards would create a massive challenge for the industry and the Australian Taxation Office, he said.
“Also the logistics around the administration of this $500,000 limit would be difficult,” he said.
