Federal election 2016: Super funds call for budget changes

The superannuation industry will push the federal government to ­retain the old concessional contribution caps.

The superannuation industry will push the federal government to ­retain the old concessional contribution caps of up to $35,000 a year and loosen the budget’s proposed $500,000 lifetime ceiling on post-tax contributions.

While industry groups expect much of the proposed budget changes to be implemented, the proposed cuts on contribution caps to $25,000 a year and the $500,000 ceiling on post-tax contributions backdated to July 2007 are the measures causing the biggest concerns.

Self Managed Superannuation Fund Association chief executive Andrea Slattery said it was important that people over 50 were given more opportunity to contribute to superannuation as they came ­closer to retirement.

“The proposed $25,000 cap is too low and doesn’t allow people to save for a sustainable retirement,’’ she said. “We would like to work with the government to work out a way to make this (the $500,000 cap) and other proposals in the budget less complex and costly.’’

This also included the proposal to limit the total amount in tax-free super to $1.6 million.

Simon Swanson, the chief executive of wealth management company ClearView, said the government should increase the proposed $500,000 cap on post-tax contributions to $1 million.

“The $500,000 cap means that it will be difficult for a large number of individuals to save enough money for a reasonable retirement,” he said.

“It also limits the ability of individuals to make one-off contributions to super such as from an inheritance, or women returning to the workforce, or farmers and small business people. This is particularly true for those people who haven’t had the opportunity of contributing to superannuation over their lifetime.”

He said the proposed new concessional super cap of $25,000 a year was also too low.

“If you are in the workforce for 40 years and contribute $25,000 a year you will have $1 million when you retire. But if you leave the workforce for a while or you don’t have the money to make the extra contributions each year it is difficult to put together enough money for a comfortable retirement,’’ Mr Swanson said.

Australian Institute of Superannuation Trustees chief executive Tom Garcia said the industry wanted to consult further with the Turnbull government.

“We need to more closely examine the proposed $500,000 non-concessional cap and the ­impact of lowering the concessional caps to $25,000 for older workers who want to catch up on their savings,” he said.

Mr Garcia, whose organisation represents trustees in the $500 billion industry fund sector, said the institute was “generally supportive” of many of the government’s budget proposals but super funds had “concerns about the complexity of some of the changes as well as the timing and cost of implementation”.

The comments come as a post-election survey of more than 500 readers of Cuffelinks, an investment newsletter, shows the government’s planned super shake-up influenced the voting intentions of more than 50 per cent of respondents. About 35 per cent said their vote was swayed by the imposition of the $500,000 non-concessional cap, the backdating of the cap, and the $1.6m limit on tax free super.