09 Jun 06 ATO Superannuation Consultative CommitteeLiz Goddard reports that the Budget proposals dominated proceedings at the ATO's Superannuation Sub-Committee meeting on Monday 5 June 2006. The major points of concern relate to the transitional period to 1 July 2007 and the limits for concessionally taxed contributions.
In respect of the contribution limits, there are many unresolved issues, including the method of valuing defined benefit support. A serious question arises about how employers can keep employees notified about the amount of support provided so that rational decisions can be made about the level of salary sacrifice. This can be very challenging if an employee is promoted during the year, where there are June/July cut off issues, and where there are multiple employers. Participants indicated the need for immediate information about the precise rules in relation to the cap on undeducted contributions, effective immediately. There is also concern about the portability arrangements and the need for a carefully designed form to collect appropriate proof of identity information. The ATO has set up a specific team to focus on Budget issues.
Three other matters were discussed.
- First, in respect of the Anti-Money Laundering measures it was agreed that the key to integrity of the system is to ensure that appropriate POI protocols are required at exit or transfer.
- Secondly, from 1 July 2006 there will be a link from the Register of Complying Superannuation Funds (ROCS) to the APRA web site. Information on the Register of Complying Superannuation Funds is to be integrated with ABR data. However, the time frame for this is uncertain.
- Thirdly, the ATO is working on communication material relating to contribution splitting, and impact on employer obligations of fund re-licensing/closure. The ATO will shortly issue a Choice practice statement indicating their penalties approach in the initial period.