Results from superannuation changes survey

The level of self-interest in the comments made about the changes to superannuation regulations, in all forums not just Cuffeflinks, is generally breathtaking. The super regime changes introduced by the Howard/Costello government were clearly unsustainable: they were, at the time, a cynical grey vote buying exercise that purported to fund what should be permanent tax law changes with a temporary resources boom windfall.

People seem to forget that tax is the price you pay for living in a modern capitalist democracy. To say that retirees have paid their fair share of tax up to retirement and shouldn't have to pay any more ignores the fact that those same retirees continue to draw on those benefits potentially for decades after retirement. Emergency services, health, education for their children and grandchildren, roads and infrastructure - the myriad of government services everybody continues to use and benefit from on a day to day basis have to be paid for.

Or perhaps those retirees simply expect their children to shoulder the funding burden, having already lived through the greatest intergenerational wealth transfer through the real estate market, making it even less likely those children will be able to save enough for the same comfortable retirement they are set to enjoy.

Whilst I agree that a $500,000 non-concessional limit is too low and has wreaked havoc with retirement planning for many, to say that a $1.6m limit on the tax free pension portion of a super fund is also too low is ridiculous. If you make just a 6% return on that $1.6m that's $96,000 p.a. of tax free income. In the context of an economy that is labouring under sharply growing government debt, that's a lot of money. And if you are lucky enough to have two members of a SMSF that can sock away $1.6m each and they both make the same return, they'd have to spend almost $3,700 PER WEEK not to end up with accumulated savings.

And if you've still got funds left over after that, you can get 6% on $300,000 in your own name and still not pay any tax on it. That adds up to $1.9m for an individual or $3.8m for a couple and (potentially) paying no tax. And remember, if you invest the $1.6m wisely and live within your means, that amount is free to grow to whatever level you can achieve.

It's a pity the purpose of superannuation was not made more explicit to start with: it was never intended to be a tax shelter but rather to provide an income in retirement. Perhaps if our politicians had the fortitude to make the meaningful changes to our tax system that our circumstances require then we could leave retirement planning alone. Until then, we can't criticize a government of any stripe for not addressing budget deficits and then squeal when they raise the taxes to do just that.

When amendments are made to taxation law, a well practised convention ensures that the existing law is typically grandfathered for taxpayers who have acted in good faith in applying and relying on the law in order that they are not disadvantaged.

Hard working, self-funded retirees have been busily providing for their retirements on the premise that the current superannuation and taxation legislation means something - if it does not, then why was it introduced?

Mr Morrison has implicitly endorsed and supported this understanding and on numerous occasions during the last 6 months and more recently, explicitly confirmed those understandings.

The ($1.6m) cap on pension phase transfers so far as they relate to transfers already made, can only logically be viewed as being retrospective in operation, reprehensible in nature, and a shameful betrayal of trust.

Weasel words by Mr Morrison that the taxation legislation will not change but that (presumably) the superannuation legislation will be amended to reverse that which has already occurred, changes nothing.

Doubtlessly, unprincipled politicians find it convenient to find politically expedient solutions to sell the fairness argument, even if fairness is itself a casualty in the process.

For all those who decry the latest significant changes, let us remember that tax-free benefits post 60, abolition of RBLs, overly generous contribution caps,TTR pensions that allowed working full time, salary sacrificing and drawing a pension supported by taxfree earnings were all past changes too. Except that they seemed to be in members' favour!

The concessions are funded by the taxpayer groaning under the age pension burden, which super was allowed to alleviate.

No criticism of the system that allows asset-rich, income-poor citizens to feed off the taxpayer, only to leave the bequest to kids missing in action re: parental care?

If the changes had not been made, it would be a lot tougher in future. The system cannot cater for outliers.

I agree with Ramani. I also find it amazing to hear people implying that superannuation is the only way to save for retirement. I did so without the benefit of superannuation, paying full tax on the earnings of my investment & savings portfolio. As a self-funded retiree I'm still paying tax on my investment earnings & do not have a health care card.. Consequently, I resent being taxed to provide benefits to those drawing a tax free income from superannuation.

There is nothing stopping people saving for retirement outside of superannuation. It is just that they will be taxed on the earnings.

We have arrived at an unsustainable position where everyone wants to collect from Government coffers, with no one willing to contribute. All this while wanting to enjoy 1st world services provided by Governments while screaming about the budget deficit.
It does not compute!

Marcia Moseley

Perhaps we should ask the electorate to suggest changes to the parliamentary pension scheme to enable members to share in the economic recovery needed to put nation back on track.

What about applying the preservation rules that apply to non parliamentary superannuation for a start.

So much for the promise that super would not have any adverse changes before the next election! Whilst agreeing with most of the changes as bringing a fairer system the retrospectivity was unexpected and screws up my plans (don't have 1.6M and without being able to put in the undeducteds).
Shame not everyone was able to do salary sacrifice along the way.

Taking the calculation of non-concessional deductions back to 2007 for the $500,000 non-concessional cap is surely a retrospective approach.

Hi John, I was acknowledging that at least you don't have to take it out if you are over $500,000, so treatment is not retrospective in that way.