Six months after the superannuation changes were put in place, self-managed superannuation fund members (SMSF) are still struggling with the complexities of the reforms, the head of the SMSF Association says.
Chief executive John Maroney said SMSF members and advisers are still coming to grips with the impact of the legislative changes in certain areas such as estate planning and death benefits.
Death benefits, which are a complex issue, have been made even more complex and while the transfer balance cap, total superannuation balances and SMSF event-based reporting are new concepts, advisers and members are trying to figure them out together, Maroney added.
"In the lead up to 1 July 2017, the industry's focus was on optimising contributions and reducing pension accounts to under $1.6 million as well as considering CGT relief for those affected by the transfer balance cap and transition to retirement changes," he said.
Consequently, members paid less attention to the longer-term strategies, namely optimising estate planning.
SMSF members who fail to understand the changes or obtain proper advice could find themselves being forced to move money out of superannuation, Maroney warned.
"But the increased complexity can't be denied, and advisers are urged to speak regularly with their clients, to streamline and assess their processes, and take every opportunity to increase their technical knowledge," he said.
Maroney also expressed concerns over changes to the assets test rules for the Age Pension that is discouraging retirement savings and has other "detrimental" behavioural effects one year on.
The changes have a significant impact on middle-income earners who have accumulated an average-sized superannuation balance and benefit from a part Age Pension payment that supplements their superannuation income, he said.