The new Superannuation rules. including Transfer Balance Caps for Defined Benefit Pensions, including the CSS Transfer Balance Cap and PSS Transfer Balance Cap, and PSS Transfer Balance Credit and CSS Transfer Balance Credit are very complex and their effects should not be underestimated.
The new Superannuation rules are particularly harsh in relation to the way they assess the $1.6 Million Transfer Balance Cap against Defined Benefit pensions such as CSS, PSS, DFRDB and MSBS. Multiplying annual pension payments by 16, regardless of age, to determine the Transfer Balance Cap is excessive in our view and for senior long serving members of these schemes, holistic changes to superannuation arrangements are likely to be required before the 1 July 2017 deadline.
For contributing CSS members the declared methodology for determining the CSS Accumulation Phase Value gives a shocking outcome and might require immediate and unexpected action with super contributions. Multiplying CSS Accumulated Basic Contributions by 2.5 as part of determining the CSS Accumulation Phase Value seems illogical as this aligns the valuation with the 54/11 formula . As most contributing CSS members are over 55 and will never have the opportunity to voluntarily claim their benefit using this inflated CSS Accumulation Phase Value whose cornerstone is 2.5 times CSS Accumulated Basic Contributions, the whole methodology seems questionable.
The new Superannuation rules are also quite harsh in the way contribution caps, for both concessional and non concessional contributions, are being reduced from 1 July 2017. For defined benefit members like contributing members of the CSS and PSS, the introduction of notional employer contributions will also adversely affect future salary sacrifice opportunities.
When you realise you are affected by the latest superannuation changes, it will be extremely important to promptly seek Financial Advice from a Certified Financial Planner to ensure you understand all of your options and can make any required changes before the 1 July 2017 deadline.
If you would like to enquire about a cost effective Financial Advice Health Check to ensure you optimise your options, including the $1.6m Transfer Balance Cap, click on the following link to contact us.
If you need assistance to optimise your situation, make contact quickly as time is running out......
If you seek our advice, our goal is to assist you to understand where you need to go and what you need to do to get there, and you can then determine the level of assistance and support you require for your journey.
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On 23 November 2016, the Australian Parliament passed the superannuation measures announced in the 2016 Federal Budget. As some of these changes are very significant, it is extremely important that you discuss your particular situation with your financial adviser and determine how these changes may affect you.
If you have unanswered questions, need a second opinion or want to confirm advice you have previously been given in relation to the superannuation changes or your Transfer Balance Cap options, including for Defined Benefit Pensions, we have all the answers!
Some of the key superannuation changes are as follows:
Additional summarised information on the dot points above has been provided by The Financial Advice Shop and can be accessed by clicking on the following link:
If you would like to read the Government's entire Explanatory Memorandum, click on the link below:
For specific information on the PSS Superannuation Scheme and the CSS Superannuation Scheme, click on the images below to visit our dedicated websites.
The new Transfer Balance Cap Legislation has implications for Transfer Balance Cap Defined Benefit, CSS Transfer Balance Cap, PSS Transfer Balance Cap. Transfer Balance Cap CSS and Transfer Balance Cap PSS. If this makes no sense well how about confirming the The new Transfer Balance Cap Legislation has implications for Transfer Balance Cap Defined Benefit, CSS Transfer Balance Cap, PSS Transfer Balance Cap. Transfer Balance Cap CSS and Transfer Balance Cap PSS.
The Transfer Balance Cap Defined Benefit as the name suggests applies as a Transfer Balance Cap for Defined Benefit pensions. The Transfer Balance Cap Defined Benefit is becoming well understood for members where the Transfer Balance Cap Defined Benefit is important.
We look forward to our future journey with you.....
New Legislation introducing the Transfer Balance Cap and Transfer Balance Cap Defined Benefit is the same as Transfer Balance Cap Defined Benefit and Transfer Balance Cap. Not sure what this means? Contact us to clarify what the New Legislation introducing the Transfer Balance Cap and Transfer Balance Cap Defined Benefit actually means and why it is the same as Transfer Balance Cap Defined Benefit and Transfer Balance Cap.
William (Bill) Waller is an Authorised Representative (ASIC No. 453076) of The Financial Advice Shop Pty Ltd ABN 17 162 572 901 AFSL 501742. Bill provides comprehensive financial planning advice and general advice in relation to credit and credit referrals. All financial planning advice is provided by William (Bill) Waller as an Authorised Representative of The Financial Advice Shop Pty Ltd.
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