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Editorial - Superannuation e-news August 2007

Monday 6 August, 2007 by Michael Perry Following the recent superannuation changes introduced through Simpler Super, a Senate Finance and Public Administration Committee has just tabled its report into the provisions of the Superannuation Legislation Amendment Bill 2007, proposing amendments to the law relating to commonwealth government and military superannuation schemes and aimed at aligning them more closely with the broader rules for super.
Assuming the bill is passed, the major proposals are that from 1 July 2008 the mandatory requirement for Commonwealth Superannuation Scheme members to make member contributions would be removed and Public Sector Superannuation Scheme members will be allowed to cease membership for other schemes. It is also intended that from 1 January 2008, CSS members be permitted to obtain early release of accumulated funds on compassionate or severe financial hardship grounds and for the prospective restoration of pensions for CSS and Military superannuation members who have had their spouse pensions cancelled upon re-marriage.

In the mean time APRA has advised that transitional relief, restricted to members whose only interest in a superannuation fund is an insurance risk interest, will apply for super funds other than SMSFs. This will allow trustees up to 31 December 2007 to obtain the member's TFN or return the member contributions net of any pro-rata insurance premiums.

For those readers who have not yet taken the opportunity to attend one or more of the Tax Office's national seminars on the new superannuation regime, this program is currently underway. It is tailored to suit a range of attendees and is proving to be very popular. Information regarding this Tax Office initiative is available on their website. Alternatively readers may telephone 1800 42 66 82 and follow the voice prompts.

Regrettably there are still reports filtering in of illegal early access to superannuation. Trustees must remain vigilant; for despite the tax rules applying to the receipt of income from super funds at or after age 60 becoming more generous the fact remains that preservation rules have not been altered with Simpler Super. It is possible that promoters of schemes may be taking advantage of the hyperbole about tax free income to dupe trustees; we would imagine though that any reasonably informed trustee shouldn't be swayed by this.