CLIENT UPDATE 28 October 2010
Superannuation Law - Moving Forward Here’s a brief snapshot of where changes to superannuation law are up to at the moment.
Government Commitments Further to the long-term superannuation reforms announced on 2 May 2010, the Government has now confirmed its commitment to the following changes to superannuation.
CONTRIBUTIONS •
increase the superannuation guarantee from 9% to 12% (scaled in from 2013 to 2019);
•
extend the superannuation guarantee to workers aged between 70 and 74 (from 1 July 2013);
•
introduce an annual government super contribution of $500 for workers paid up to $37,000 a year (from 1 July 2012); and
•
allow individuals aged over 50 with superannuation balances below $500,000 to make up to $50,000 per year in concessional contributions (from 1 July 2012).
COOPER REVIEW – MYSUPER The Government plans to introduce MySuper from 1 July 2013. Under the proposals, a MySuper fund will include the following features: •
Licensing and monitoring by APRA
•
Available to anyone making contributions to super
•
No entry fees
•
Exit fees limited to cost recovery
•
No commissions for retail distribution and advice
•
Value-for-money obligations on superannuation trustees
•
A simple investment option
•
Standardised reporting
Given the wide-reaching impact of the changes under MySuper, we will continue to watch what the Government is doing and keep you up-to-date via our Client Updates.
TURKSLEGAL
CLIEN T U P D A T E
COOPER REVIEW - SUPERSTREAM As a first step, the use of Tax File Numbers as primary account identifiers will be allowed (from 1 July 2011). Not much else has been said about SuperStream at this stage, but most of it seems to be non-controversial. We will update you as the changes are announced.
OTHER COOPER REVIEW RECOMMENDATIONS The Government has said that it will respond to the remainder of the Cooper Review recommendations by the end of 2010. Again, we’ll keep you posted!
SLAB 2010 The Superannuation Legislation Amendment Bill 2010 (SLAB 2010) has now been passed by both houses and is now awaiting Royal Assent. The amendments under SLAB 2010: •
facilitate the payment of unclaimed superannuation moneys to the ATO by territory authorities and public sector superannuation schemes and the subsequent pay-out by the ATO of those moneys;
•
permit the current industry practice to continue in relation to the deduction of total and permanent disability premiums for the income years 2004-05 to 2010-11. See Exposure Draft - Income Tax (Transitional Provisions) Regulations 2010 for the definition of ‘permanent disability’ for these purposes;
•
allow funds to acquire an asset in specie from a related party of the fund following the relationship breakdown of a member of the fund and makes various related amendments.
•
amend the income tax legislation to: •
allow a deduction for eligible contributions to be claimed from successor superannuation funds after 1 July 2011;
•
increase the time-limit for deductible employer contributions made for former employees;
•
clarify the due date of the shortfall interest charge for the purposes of excess contributions tax;
•
allow the ATO to exercise discretion for the purposes of excess contributions tax before an assessment is issued;
•
provide a regulation-making power to specify additional circumstances when a benefit from a public sector superannuation scheme will have an untaxed element; and
•
make various administrative changes.
TURKSLEGAL
CLIEN T U P D A T E
These amendments generally commence on the day after Royal Assent. Paul Cleary advises on all aspects of superannuation law and has considerable practical and legal experience in this area.
For more information, please contact: Paul Cleary Partner T: 02 8257 5760 M: 0407 052 170 paul.cleary@turkslegal.com.au
Sydney | Level 29, Angel Place, 123 Pitt Street, Sydney, NSW 2000 | T: 02 8257 5700 | F: 02 9239 0922 Melbourne | Level 10 (North Tower) 459 Collins Street , Melbourne, VIC 3000 | T: 03 8600 5000 | F: 03 8600 5099 Insurance & Financial Services | Commercial Disputes & Insolvency | Workers Compensation | Business & Property
TURKSLEGAL
www.turkslegal.com.au
CLIEN T U P D A T E