People operating self-managed superannuation funds affected by the recent Budget measure cracking down on defined benefits arrangements have been granted some breathing room, with the Federal Government in early June agreeing to review and clarify the initiative.
The Government met with industry representatives in early June to address concerns following the Budget night decision which was perceived to be targeting arrangements that avoid limits applying to tax concessions and social security means tests.
The Assistant Treasurer, Senator Helen Coonan, says the talks with the industry were constructive and highlighted the need for more certainty surrounding the grandfathering provisions in the integrity regulations gazetted after the Budget.
“Both the Australian Taxation Office and the Australian Prudential Regulation Authority have committed to issuing clarifications that outline the conditions of the grandfathering arrangements for those currently offering lifetime and life expectancy pensions in their do-it-yourself funds,” she says.
“The Government also recognises there may be some transitional issues that affect people who want to retire and provide a complying pension in their DIY fund before September 20, when the new market-linked pension product will become available,” Coonan says.
She says she has committed to examining an interim solution for people who may not be able to obtain a complying pension and can’t access the higher reasonable benefit limit in the fund, pending a new market-linked product coming on stream.
“While it is important that the integrity of the superannuation system is enhanced, it must not unfairly impinge on people who are genuinely trying to do the right thing and effectively plan for their retirement within the rules,” Coonan says.
