Tech Files: Contribution Opportunities

This paper was presented at the SMSF Association National Conference on February 14 2018 by Peter Crump of ipac South Australia

The words “change” and “superannuation” are often used in the same sentence. Those who have practised in the superannuation industry for a number of years are used to the constant change which occurs and are used to the ongoing challenge of remaining abreast of the rules and regulations relating to superannuation.

Those readers who are licensed advisers will be well aware of the concepts of Best Interest Duty and better position outcomes. These concepts are pertinent for all practitioners in the superannuation segment, especially those in the SMSF segment, since we need to ensure that our recommended actions and strategies will leave our clients in a better position and that our advice is in their best interest. This relates not only to the use of superannuation as a wealth creation or savings vehicle, but also the selection of an SMSF structure as the superannuation vehicle of choice for our clients.

To ensure that we achieve this outcome, we need to review the strategies relating to contributions which have previously been of assistance or value to our clients, to understand which of these remain appropriate even after allowing for the significant changes, what greater diligence is required under the new rules with these strategies and how strategies can be used in a different context, but for the benefit of the client.

This latter point is important, since our responsibility to our clients requires that we not only understand how they can work within the rules, but also possibly use the rules to their advantage.

In this paper, contribution strategies will be revisited, with special consideration around how the changes will affect the value derived from the strategies, and new strategies to either work within the new rules or to improve a client’s position in a way which may not have been originally envisaged under the new rules.