Wealth Intelligence

Superannuation changes: And so it came to pass...

And so it came to pass...

...that the government's superannuation changes were passed.

Please see our previous Wealth Intelligence article Wealth Intelligence 9 November 2016 for the superannuation changes that have now been passed by both houses of parliament and the relevant provisions of which will be effective on 1 July 2017. 

There is much fine detail to analyse and consider.

First Samuel’s Strategy Team is working through this detail and identifying appropriate strategies to ensure each client remains best placed in this new regime.

Four key client groups

There is little point in presenting the changes in their entirety.  We don't have the space and you don't have the time (or patience).

Instead, we have, as usual, focussed on the changes from a client point of view and have, very broadly, identified four key client groups.  Namely, those who:

  1. require no major change to their wealth strategy prior to 30 June 2017 (although there may be longer term implications that need to be considered);
  2. are at or near the (individual) ‘transfer balance cap’ figure of $1.6m;
  3. are operating ‘transition to retirement pensions’ and who should consider ceasing these effective 30 June 2017 (other than if they require the cashflow); or
  4. who may be in a position to maximise non-concessional contributions prior to 30 June 2017 (i.e. under the existing contribution rules).

Some clients may find themselves affected by more than one of the above (i.e. of items 2, 3 and 4).

Rule complexity

Image result for image complexity

The rules are complex, especially for those clients who are at or around the transfer balance cap figure of $1.6m.  For example, issues might be:

  • How much of your investments should you maintain outside of superannuation?
  • Should you take funds out of superannuation?
  • Should you create a second SMSF?
  • How best to manage Capital Gains Tax (CGT)?

Each client different

I emphasise that each client’s situation is different.  So there is no ‘one size fits all’ approach.  It’s very much a case-by-case situation, understanding all of your objectives.

I also emphasise that First Samuel is uniquely placed to capture the broadest opportunities from the new regime as:

  • We manage client portfolios individually
  • We manage both superannuation and non-superannuation (e.g. family trust, individual, etc) portfolios and so can offer the most appropriate investment vehicles
  • We understand your individual tax and superannuation details

We are continuing our careful analysis, on a client-by-client basis.  We will contact each and every client, and that contact will be in enough time for strategies to be prepared, considered and implemented to meet the requirements.  In the meantime...

If you have any immediate questions or concerns please contact your Client Strategist: Nikki, Simon, Jack, Jenny or me.