SMSFs in rebalancing flurry

Benefit payments for self-managed superannuation fund members jumped by 71% in the March quarter, indicating a last-ditch effort to re-adjust balances head of the July 1 legislative changes to super.

SuperConcepts' survey of 2750 SMSFs shows the average benefit payment from the December quarter increased from $16,256 to $27,900. The majority of members (60%) opted for income streams rather than lump sum payments.

Interestingly, those choosing lump sum benefits increased from 20% to 40% during the quarter. This shows more trustees are implementing withdraw and re-contribution strategies to take advantage of the current non-concessional contribution caps, the report said.

From 1 July 2017, members' tax-free pension accounts cannot exceed $1.6 million, while excess amounts must be kept in accumulation phase.

These non-concessional contributions to an accumulation account will commence a 100% tax-free pension; a member can also make non-concessional contributions to a spouse to try and equalise balances.

"Some trustees also appear to be reducing their total superannuation balances and drawing monies from the superannuation system," it said.

During the period, average contributions inched 7% from $8548 to $9138.

The report also found the big four banks dominated SMSFs' largest holdings, with the Commonwealth Bank topping the list, followed by Westpac, ANZ and NAB.

Telstra, Magellan Global Fund, BHP, Platinum International Fund, Wesfarmers and CSL rounded the top ten investments, representing 15.5% of total SMSF assets.

Read more: BenefitANZBHPCommonwealth BankCSLMagellan Global FundNABPlatinum International FundTelstraWesfarmersWestpac
Editor's Choice
About three-quarters of Australian institutional investors are incorporating environmental, social and governance factors in investment decisions.
Businesses looking to integrate enhanced technological capability must consider its future impacts, or else risk creating a greater trust deficit in the financial services industry.
A comprehensive review of Praemium chief executive Michael Ohanessian's termination and subsequent reinstatement determined the previous board acted inappropriately and unreasonably.
Advisers will soon have access to Challenger's deferred lifetime annuities through Colonial First State platforms.
Brought to you by
27 APR 2017
Smart beta strategies have come of age. I remember them being discussed several years ago with either cynicism or amusement among the institutional circles. Not many took 'smart beta' seriously. The tone ...
Get it Daily
Keep up to date, don't be the last to know! Get the Financial Standard Daily Newsletter.
Pocket investment guides featuring adviser case studies and a glossary.
Investing trends and strategies from the industry’s thought leaders.
Putting the spotlight on investment products that matter.
Expert Feed
Michelle Baltazar
A case for digital activism
The time is ripe for financial advisers to embrace their role as digital activists - fiduciaries who are early adopters of finance ...
Emma Rapaport
Smashed on university fees, smashed on retirement
Since Scott Morrison's pre-budget announcement that debt would be reclassified as 'good' or 'bad', the government spending spree has ...
Christopher Page
The next generation
On March 20, David Rockefeller - former Chase Manhattan chair and last of Standard Oil founder John D. Rockefeller's grandchildren ...
Michelle Baltazar
Hitting the mark
Ten years from now, every financial adviser in the country will be offering their client a managed account solution. It may happen ...
Featured Profile
Professional Subscription for $295
(inc GST) for 1 year.
FS Advice
The Australian Journal of Financial Planning.
Get the free iPad app
Download the Financial Standard iPad app for FREE.
Link to something nxJFrWgr