The federal government’s new non-concessional contribution (NCC) cap will result in fewer complications than the original retrospective lifetime measure from an SMSF administration standpoint, however, the legislation itself must avoid introducing any administrative difficulties.
Class chief executive Kevin Bungard said the removal of the retrospective element contained in the original proposed $500,000 lifetime NCC removed a significant burden for the entire industry, particularly for SMSF trustees and administrators.
“I think the challenge will be if the legislation doesn’t line up with administration practices, it’s difficult for people to get access to information and [there have already been issues with] people going back to the ATO to confirm their history of contributions, et cetera,” Bungard told selfmangedsuper.
“That’s when it gets difficult – when it gets complicated for the industry.
“This latest proposal sounds much more straightforward and much easier to implement.
“Less complication is always a good thing for the industry.”
He said Class would make the necessary changes to its software to suit the new NCC rules.
“From our perspective as a software supplier, we’re happy to make changes to support what the legislation says and that’s part and parcel of what we do,” he said.
“We’ll obviously look into it as it becomes legislation, but I think there’s still a little way to go at the moment in terms of it navigating our current parliament.”
On 15 September, the government scrapped its proposed super measure for a $500,000 lifetime NCC cap, counted from 1 July 2007.
It was replaced with an NCC cap of $100,000 a year with a maximum threshold of $1.6 million, and includes a three-year bring-forward rule.
Treasurer Scott Morrison said legislation for all measures would be introduced by the end of the year.