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Accountants urged to address pension strategies now with clients

While the proposed super reforms have not yet been legislated, accountants should start discussing potential strategies with clients now, as there will be limited time once the reforms are passed, warns SuperConcepts.

Accountants urged to address pension strategies now with clients
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  • mbrownlee
  • October 26, 2016
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SuperConcepts executive manager, SMSF technical and private wealth Graeme Colley said accountants should encourage clients to start thinking about the impact of these rules now.

If the accountant is licensed to give advice, Mr Colley said they should be sitting down with clients, particularly those with close to or more than $1.6 million in super and discussing what pensions they want, if they want to draw money out of the superannuation fund and what assets they want inside and outside of super.

“What some clients may find is that by investing in those assets personally, they might still fall under the tax free threshold, rather than paying 15 per cent tax on the earnings in super,” said Mr Colley.

“I’ve seen clients up to around $2 million, thinking well should I draw that money out now, and maybe gift it to the kids, because it’s going to go to them anyway.”

Mr Colley said some clients will also be considering whether to take advantage of the $540,000 bring-forward non-concessional contribution amount.

“Those people [who] can contribute will [need to] look at whether that’s worthwhile,” said Mr Colley.

Meeting the work test will be another issue that clients over 65 and over need to start thinking about also in terms of what contributions can be made to super.

“That’s been a reasonably common question that I’ve had with some of our clients now they’re saying ‘okay well that’s all well and good, but do I meet the work test or can I meet the work test or how can I do that?’” he said.

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