Want to know more?

Leave your details below and we'll get in touch! Alternatively you can also make a written enquiry via our Contact form.

×

‘Unfinished superannuation business’ to watch for in 2021

SMSF services firm Heffron has outlined some of the legislative bills and pieces of guidance the SMSF industry is still waiting on and some of the recent proposals floated by the government.

   

2020-21 federal budget proposals for superannuation

As part of the 2020-21 federal budget, the government announced a raft of new measures for super funds aimed at addressing underperformance and multiple accounts.

The measures include plans to staple existing superannuation accounts to a member to avoid the creation of new account when a person changes employment, performance benchmarking and the introduction of the best financial interests duty.

Heffron head of SMSF technical and education services Lyn Formica said the government released exposure draft legislation for the measures in November, with submissions now closed.

“Given many of the measures have a 1 July 2021 start date, we expect Bills will be introduced to Parliament soon,” said Ms Formica.

Bring-forward measure for those aged 65 and 66

The bill containing the measure to extend the use of the bring-forward rules for non-concessional contributions from age 65 to age 67 failed to pass in the last two weeks of parliamentary sittings for 2020.

With Parliament not returning to early February, this leaves some clients in this age group in a difficult position.

Australian Executor Trustees senior technical services manager Julie Steed previously noted that some practitioners have been advocating a strategy when the client puts $1 more so that the bring-forward rule is triggered but the excess is only $1.

However, she warned that for many licensees, advisers need to base their advice on current laws.

Heffron managing director Meg Heffron said while contributing the full $300,000 now would not be a compliance issue if the new rules failed to be passed, it would create an excess non-concessional contribution, which would come with serious tax consequences.

Six-member SMSFs bill

The bill to increase the maximum number of members of an SMSF from four to six, Treasury Laws Amendment (Self-Managed Superannuation Funds) Bill, is also still before the Senate, said Ms Formica.

The earliest possible start date for this measure is now 1 April 2021, she noted.

In early November, the Senate economics legislation committee recommended that the six-member SMSF bill be passed after it was previously referred to the committee for inquiry and report.

Legacy pension proposal

As part of its Mid-Year Economic and Fiscal Outlook (MYEFO) released in December, the government also outlined a proposed change to enable the partial commutation of certain legacy pensions.

The MYEFO stated that the measure will help ensure that retirees who have commuted and restarted certain market-linked pensions, life expectancy pensions and similar products are treated appropriately under the transfer balance cap.

However, Ms Formica explained that unless the measure is far wider than the wording suggests, she expects it is unlikely to bring much joy to many of the members still running these pensions.

“We have long argued that the government should allow legacy pensions to be converted to simple account-based pensions,” she said.

“This would provide a simple solution to the many problems that these pensions present given that the law has changed profoundly in the 13 plus years since these pensions were actively used in SMSFs.”

Ms Formica said it appears the government instead plans on further tinkering, which will only provide relief to some members.

Non-arm’s length expenditure guidance

One of the other key items that SMSF professionals are still waiting for said Ms Formica is the ATO’s finalised ruling on non-arm’s length expenditure.

“The ATO is still to finalise their view on the situations in which SMSFs will be considered to have non-arm’s length income (NALI) because the expenses of the fund are lower than they would have been in an arm’s length situation,” she explained.

“We expect the ATO will be seeking to release their final view before the transitional rules of PCG 2020/5 – covering expenses of a general nature – expire on 30 June 2021.”

 

 

Reporter
05 January 2021
smsfadviser.com

 


David Forrest Download David's Adviser Profile

David Forrest

Director
BEc (Acc), MBA, CPA, FFin

David has been in the Financial Services Industry for nearly 30 years. He was one of the founding Directors of the successful Financial Planning and Stockbroking Practice, Henderson Gregory Forrest, for a decade. Prior to that, he held senior roles in companies such as ING, KPMG Accountants and AMP. David was previously Chairman of OAMPS Superannuation Trustee Board and currently serves as an independent Board Director for several companies.

David’s extensive experience in all forms of superannuation, including Self Managed Super Funds (SMSF), Defined Benefit Funds, retirement funding through Account Based Pensions, stockbroking with a focus on Direct Share Investment, Taxation/Remuneration Planning, Centrelink, Aged Care and business management, equip him to advise expertly on all aspects of Financial Advice.

Those with a particular interest in superannuation/SMSFs, direct share investment, salary packaging or applying for the Centrelink Pension will find his knowledge and ability in formulating and implementing creative, logical and simple wealth creation strategies a valuable asset.

David maintains a strong personalised client service focus, providing tailored solutions for clients.

Qualifications:

Memberships:

Contact:

David Forrest is an Authorised Representative of Integrity Financial (SA) Pty Ltd ABN 16 133 921 187 — AFSL No 334846

Michelle Forrest

Michelle Forrest

Business Finance Manager
B Bus (Acc), CPA

Michelle’s career has spanned across the Financial Services, Retirement Living and Aged Care industries working in the private sector, not for profit and more recently with the state government for over 20 years. Her experience extends to many facets of the financial services industry, having worked in superannuation administration, technical support and financial planning practice administration.

Commencing with AMP and subsequently working in commerce and accounting roles with companies such as Brambles, Adelaide Bank Retirement Services, ECH Inc and SA Health and Wellbeing, Michelle returns to financial services after working in practice financial management at Henderson Gregory Forrest. This wide range of experience from senior accounting and management roles has provided Michelle with a strong background in business administration.

With an astute financial acumen and keen interest in business improvement strategies, Michelle ensures the smooth running of the Integrity Financial Advisory practice providing valued management support to our personalised client service focus.

Qualifications:

Memberships:

Contact:

Darren Chalk Download Darren's Adviser Profile

Darren Chalk

Financial Adviser
B Com, Dip FP

Darren joins the Integrity team as a strong technical specialist with almost 20 years’ in the Financial Services industry. He has extensive experience advising clients on how to build and protect wealth, prepare for retirement and retire comfortably.

Commencing with advising clients on direct equities for over 10 years at Baker Young, Tolhurst Noall, and ABN AMRO Morgans, his career expanded to providing holistic client advice, having operated his own financial services licence and company. Most recently having worked for a 'Big 4' bank, he has welcomed the more personalised ‘client first’ approach that is evident at Integrity Financial Advisory.

With a deep understanding of investment markets, he is appropriately qualified and authorised to provide direct share advice, as well as superannuation/SMSF advice, encompassing both investments and insurance.

Meticulous in his approach, he aims to deliver quality outcomes for clients by understanding their financial situation and needs before providing advice which is central to our advice process. Darren supports David in tailoring solutions for all client financial advice needs.

Qualifications:

Memberships:

Contact:

Darren Chalk is an Authorised Representative of Integrity Financial (SA) Pty Ltd ABN 16 133 921 187 — AFSL No 334846

Natasha Bartlett

Natasha Bartlett

Client Service Manager

Natasha commenced working in the financial services industry in June 2008 and is a new addition to the Integrity team. During the past 11 years, she worked closely with advisers providing administration support in a share broking and financial advice business.

Having successfully completed her RG146 accreditation in securities and managed investments and continued her studies to complete her competency in Superannuation, Natasha can ably assist with all aspects of fixed interest, cash management, portfolio administration, direct shares and client advice implementation.

Natasha takes time to ensure she understands our client’s financial goals and needs and believes in creating, preserving and utilising wealth through effective financial management as a key objective in helping clients.

Qualifications:

Contact:

Kelly Collins

Kelly Collins

Client Service Manager

Kelly has worked in the Financial Services Industry for over 10 years and has supported David since 2013. Kelly’s primary background is in customer service and administration.

On starting in the industry, Kelly initially focused on direct shares, stockbroking administration and client liaison. Since moving to the Client Service Manager role, Kelly has developed skills encompassing all aspects of financial planning including client advice implementation and term deposit management.

Kelly’s experience in the direct share environment, especially management of estates, provides a key part of the direct equity expertise in Integrity’s Client Service Team.

Returning from Parental Leave following the arrival of her second child, Kelly has developed further honed multi-tasking skills after juggling the demands of a growing family.

Contact:

Jasmine Smith

Jasmine Smith

Client Service Manager

Jasmine has worked in the financial services industry for over 12 years in all areas of client administration, working with David since 2013.

Jasmine has extensive knowledge and experience in client service including implementation of advice, portfolio reporting, assisting with the establishment of Self Managed Super Funds (SMSFs), term deposit management and a long history of helping clients with their enquiries.

Jasmine’s attention to detail, yet gentle approach, means she is able to solve the trickiest of questions for our client community.

Jasmine has gained her Certificate III in Financial Services qualification.

Contact:

Merrilyn Smith

Merrilyn Smith

Client Service Manager

Merrilyn has worked in the financial services industry for over 11 years in all areas of client administration, and is a new addition to our client services team, returning from Melbourne to join the team in June 2019.

Merrilyn has extensive knowledge and experience in client service including implementation of advice, managed fund administration, assisting with the establishment of Self Managed Super Funds (SMSFs) and process improvement for the previous practices she has worked with. Merrilyn’s experience with direct shares constitutes the other part of our administrative support for direct equity investments.

Merrilyn’s warm and caring nature continues to endear her to our clients and she has already established herself as a valued member of our team.

Contact: