Superannuation will remain the best vehicle to manage retirement savings despite proposals to increase tax on earnings for some fund members.

The government’s planned move to add a higher tax on superannuation earnings is inconsistent with claims the new tax would be an equitable measure.

Immediate withdrawal of monies from SMSFs to ensure member balances are below $3 million to avoid the proposed new tax is unnecessary.

Using a deeming rate to calculate the proposed 30 per cent charge on super balances over $3 million may not generate a better outcome for individuals.

SMSFs with reserves will probably not be able to use them to pay the proposed higher earnings tax but have them allocated to members to assess the tax.