A number of changes in Super regulation have come into force recently, and with the potential for large fines to be levied for non-compliance with these new standards, the onus is on employers, individuals, and trustees to maintain proper controls.
Concessional contribution cap
The concessional contribution cap (with the concessional rate of 15%) has been raised to $35,000 per annum for those over 60.
Excess contribution penalties relaxed
Previously taxed at a total of 46.5%, excess contributions will now be taxed at an individual’s marginal rate, though interest will be charge for the late payment of tax.
Super guarantee has increased
Most people will now see their superannuation guarantee increase to 9.25% (from 9%), and employers of workers over 70 years old must also make these contributions.
With regard to SMSF’s, there are a number of specific changes:
Firstly, trustees must use an auditor that is registered with the Australian Securities and Investments Commission, and it will be the job of this auditor to ensure that the value of assets held within the SMSF is recalculated at the current market price at each year end.
The annual levy payable to the Australian Tax Office has increased from $200 to $321, with $191 charged for the 2013 financial year and a further $130 as a 50% up-front payment for 2014.
Trustees must also review an SMSF’s investment strategy at least once each year, and will now be required to keep an SMSF’s assets completely separate from any other assets it holds.
New reporting rules
A new set of data standards has been introduced for reporting, and processing rollovers. Standardising the way in which supers, employers, and trustees interact with each other and the Australian Tax Office, the process will become more streamlined and efficient. However, the new standards require electronic communication of contributions to the Australian Tax Office, as well as electronic payments to the super fund.
While there will be a transitional period through to December 2013 for all Australian Prudential Regulation Authority (APRA) regulated fund providers, those wishing to rollover such funds to SMSFs must do so using relevant electronic and payment details.
These electronic communications must comply with APRA standards, in both breadth of information and format in which it is delivered.
These data reporting regulations are further transitioned in for employers through the following two years, with large and medium employers required to comply by July 2014, and small employers (fewer than 20 employees) a year later.
In conclusion
The regulatory environment for supers is changing rapidly. Ignorance of these changes will not be accepted as defence against fines imposed, making it essential for employers, trustees, and super fund holders to keep up-to-date with these changes and comply with them.
Recognised throughout the SMSF industry as leaders in the field, and selected by MacQuarie as the only firm in Victoria, and one of only five in Australia, for their SMSF expertise, Super Finance’s advisers are perfectly positioned to help you understand and comply with your responsibilities under the new super standards.
