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Planning software may need post-budget change

The changes to the superannuation rules contained in last week’s federal budget had implications for financial planning software providers as some inbuilt strategies had now been compromised, according to NowInfinity principal Grant Abbott.

In a post-budget webinar, Abbott pointed out items such as recontribution strategies, considered as a fairly standard piece of advice, would now need to be re-examined, especially in the context of the software financial planners used.

“Areas of focus such as recontribution strategies, which just become paramount, or transition-to-retirement income streams, all of that functioning and all of that modelling that is built into the current financial planning software is effectively null and void as of today [4 May],” he said.

“That’s because a lot of that software has certain capabilities built in and now to do some of that modelling really doesn’t make sense.

“You can’t do a recontribution strategy if you’re not sure what the member’s existing lifetime NCCs (non-concessional contributions) have been since 1 July 2007.”

As such, he flagged the record keeping of the contributions as another area of concern for the ATO and software providers.

“Who actually keeps all of that data? Is it the ATO? We hope so because the ATO looks at NCCs. But it only looks at NCCs in terms of determining excess concessional and non-concessional contributions on a year-by-year basis,” he said.

“Who has all of that information from 1 July 2007, bearing in mind there have been sales of businesses that create NCCs, QROPS (Qualifying Recognised Overseas Pension Schemes) create NCCs, spouse contributions create NCCs, so there are a whole lot of non-concessional contributions and I’m just wondering who actually has all that historical data.

“That means there is confusion with the software and at the adviser level.”

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