Benefit payments rise dramatically ahead of July 1 super changes

SMSF trustees looking to take advantage of the current rules around non-concessional caps have .....

   

 

..... significantly increased benefit payments, according to the latest SuperConcepts SMSF Investment Patterns Survey.

In the March 2017 quarter the average benefit payment increased significantly from $16,256 to $27,900.

Overall contribution levels also continued to rise in Q1, increasing from $8,548 to $9,138. This continues the trend established in Q4 of last year which saw contributions increase by 181 per cent following the Government’s confirmation that the proposed Super changes will come into effect on July 1 2017. The rise, however, is a reversal of the historical trend where Q1 has always been the lowest quarter each year.

SuperConcepts Executive Manager Technical & Strategic Solutions Phil La Greca said the findings clearly demonstrated that SMSF trustees were looking to maximise current non-concessional contribution rules.

The current $180,000 after-tax contributions cap, and the three year $540,000 bring-forward rule remain until 30 June 2017.

Commenting on the new trend to emerge around benefit payments, which almost doubled mainly through the increase in lump sum withdrawals, Mr La Greca said:

“Trustees are implementing withdraw and re-contribution strategies to take advantage of the window of opportunity before July 1. Strategies include making non-concessional contributions into an accumulation account, starting a new 100 per cent tax free pension and making contributions to a spouse to try and equalise member balances and maximise access to the $1.6 million pension transfer balance cap for both persons.”

During prior quarters the split of lump sum withdrawals versus pension payments tended to be around 20 per cent versus 80 per cent. In the first quarter of 2017 the split shifted to 40 per cent versus 60 per cent.

Asset allocations largely remained unchanged as SMSF trustees and their advisers focus on dealing with the opportunities around the upcoming changes.

The quarterly SuperConcepts SMSF Investment Patterns Survey covers approximately 2,750 funds, a sample of SMSFs administered by Multiport (part of the SuperConcepts group) and the investments they held at 31 March 2016.  The assets of the funds surveyed represent approximately $3.2 billion.


Cut & Paste
18 May 2017
www.professionalplanner.com.au


All the world’s a stage, and all the men and women are merely players William Shakespeare
A fool and his money are soon parted. What I want to know is how they got together in the first place Cyril Fletcher
My main problem is reconciling my gross habits with my net income Errol Flynn
All I ask is the chance to prove that money can't make me happy Spike Milligan
A very rich person should leave his kids enough to do anything but not enough to do nothing Warren Buffet
Next to being shot at and missed, nothing is quite as satisfying as an income tax refund F.J. Raymond
Those are my principles, and if you don't like them... well, I have others Groucho Marx

© 2018 Moneytax. All rights reserved. Disclaimer | Privacy

Site by PlannerWeb.