The SMSF Association has urged the federal government to introduce a spouse rollover measure for superannuation fund members that would allow individuals with higher super balances to roll over a portion of their super balance to their spouse to help even out balances.
In its 2019/20 budget submission, the association said the gender retirement gap continues to be an issue in the super system.
According to the industry body, the recent introduction of the transfer balance cap and the lack of opportunity for couples to adjust for its introduction have meant balances are heavily skewed to one member.
SMSF Association chief executive John Maroney said: “Although there are strategies that allow re-contributions, such as using spouse contribution tax offsets or spouse contribution splitting, they are limited in their effectiveness due to contribution threshold and cap restrictions, withdrawal restrictions, and lack of flexibility and impact of spousal contribution measures.
“In our opinion, a rollover measure would be far more effective.”
In addition, the association is also pushing the government to lift the contribution cap for individuals over the age of 50 by $10,000 to $35,000, arguing the current $25,000 contribution cap is inadequate, particularly for those approaching retirement age and wishing to be self-sufficient in their later years.
To strengthen its case, the member body referred to Rice Warner research analysing the contribution patterns of SMSF members that showed a significant increase in voluntary contributions by members who are in their 50s and above.
Further, the submission suggested now was a fitting time for the government to consider defining the objective and role of super, and reinforce recommendations regarding SMSF education for SMSF advisers.