One year on from the introduction of the most significant superannuation reforms in over a decade,
practitioners working at the coalface are experiencing a diverse range of compliance and planning
issues which are only now coming to light.
In his paper, excerpted here, presented at the SA Super Day, Peter Burgess (SuperConcepts) dives into a range of issues relating to the ‘transfer balance cap’ (TBC) and ‘total super balance’ (TSB).
Peter is one of our presenters at the upcoming
2019 Super Series, which takes place around the country from March.
Peter notes in his paper that that these new concepts of an individual’s ‘transfer balance cap’ and ‘total super balance’ are central to almost all of the reforms that came into effect on 1 July 2017. His paper seeks to identify compliance and planning issues relating to a member’s TBC and TSB and explains what actions practitioners can take to mitigate unintended breaches of the law.
Total super balance
An individual’s TSB is the sum of their accumulation-phase and retirement-phase interests across all of their superannuation funds. It is measured and determined annually at 30 June, based on relevant asset values supporting accumulation and retirement-phase interests at that date.
An individual’s TSB on 30 June impacts their contributions caps, ability to access several tax offsets in a following financial year and, if they are a member of an SMSF, may affect the way their fund calculates exempt current pension income (ECPI).
The paper covers:
- Non-concessional contributions cap
- Concessional contributions cap
- Market value versus net market value
- Reserves
- Limited recourse borrowing arrangements
- Disregarded small fund assets
Transfer balance cap
Due to the introduction of the TBC, SMSFs now have new reporting obligations.
Peter’s paper goes on to look at event-based reporting, and the Transfer balance account report which is used to report certain events, separate from the SMSF annual return (SAR). The TBAR enables the ATO to record and track an individual’s balance for both their TBC and TSB.
He then covers:
- Structured settlement contributions
- Commutation documentation
- Market-linked income streams
- Exempt current pension income
- Transition to retirement income streams
- Death benefit pensions
- PAYG withholding obligations
The paper is available to view here.
Peter is a previous Board Member and now full-time Technical Director of the Self-Managed Superannuation Funds Professional Association of Australia (SPAA).
He is the chair of the SPAA National Conference Committee and has overall responsibility for the technical content delivered at SPAA events, and the author of SPAA's technical bulletin "Technically Speaking".
Peter is a member of the ATO's NTLG Superannuation Technical Sub-Group, the ATO's Superstream working group and the ATO's SMSF Stronger Super working group. As a regular public speaker at industry conferences, Peter has established himself as an authority in the field of SMSF technical advice and education. He has also published a number of articles and accredited training material on the subject of SMSFs and is an adjunct lecturer with the University of Adelaide.
He has an MBA from Adelaide University, a degree in economics and postgraduate qualifications in superannuation management and finance.
Find out more about Peter’s upcoming session exploring changes to pension strategies post-2017’s superannuation reforms, and the rest of the programs in the
2019 Superannuation Series
, on our website.
