Need to know

Outlined below are all the latest news you 'need to know'.

 
Issue What it means  What do you need to be thinking about?
New super regulations
Ability to commute certain complying income streams with an excess transfer balance amount

Regulations have been made to enable any excess transfer balance amount to be commuted from certain complying income streams.

The changes do not address plans to allow for the commutation of legacy pensions. 

The regulations address issues arising from situations where a capped defined benefit income (CDBIS) stream such as a TAP commenced prior to 1 July 2017 are subsequently rolled into a new TAP which are not treated as a CDBIS. 

A CDBIS such as a TAP started pre 1 July 2017 cannot create an excess transfer balance cap however, if rolled out into a new TAP post 30 June 2017 the new income stream would not be treated as a CDBIS meaning there may be excess transfer balance cap issues.

The changes allow any resulting excess transfer balance amount to be commuted to rectify the excess.

Advisors should consider whether:

  • the amount be retained in super and invested according to current investment strategy?
  • the amount be withdrawn and invested outside of super or used to pay off debts?
  • specific assets need to be sold to reduce balance?
Extension of minimum pension payment rates – Regulations made

Regulations have been made that give effect to the extension of the temporary reduction in minimum drawdown rates for super pensions for 2022/23, as announced by the Government in the 2022 Federal Budget.

Advisers should check with super funds whether:

  • a client who has previously nominated to receive the legislated minimum will automatically have their 2022/23 annual payment calculated at the reduced amount
  • new instructions will be required for 2022/23 where a client has previously requested to vary their minimum to the temporary reduced rate for the current financial year.
Australian Tax Office
The Australian Taxation Office (ATO) releases new 2022/2023 super rates and thresholds

The ATO has released several important superannuation rates and thresholds for the 2022/2023 financial year.

One important change includes the increase in super guarantee from 10% to 10.5% from 1 July 2022.

 

It may be necessary to update superannuation recommendations for the new financial year in the context of these rate thresholds and other changes from 1 July 2022.

In addition, it may be necessary to update affected assumptions in any financial modelling tools.

 

More information

If you have any questions, or would like more information, please contact the IOOF TechConnect team on 1300 650 414.

Disclaimer
The information in this section of the website is intended for financial advisers only and is not to be distributed to clients. It has been prepared on behalf of Australian Executor Trustees Limited ABN 84 007 869 794 AFSL 240023, IOOF Investment Management Limited ABN 53 006 695 021 AFSL 230524, IOOF Investment Services Ltd ABN 80 007 350 405, AFSL 230703 and IOOF Ltd ABN 21 087 649 625 AFSL 230522 based on information that is believed to be accurate and reliable at the time of publication.