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Retirees who are affected by the $1.6 million transfer cap on pension funds do not seem to care about the changes, leaving professionals in the driver’s seat to ensure compliance, according to one mid-tier.
Despite the push for accountants to be proactive in contacting clients about the new superannuation $1.6 million transfer cap, HLB Mann Judd’s wealth management partner, Michael Hutton, says retirees affected by the cap “have a lot of money” and are therefore not concerned about the changes.
“I don’t think [the transfer cap] gets a lot of airplay because people with $1.6 million in super, you know, who cares? They know how to look after themselves. It’s a lot of money. If it’s a husband and wife and they have 3.2 million between them, that’s a lot of money,” Mr Hutton said.
“I don’t think the government’s crying crocodile tears for [these retirees]. There [are] not a lot of people feeling sorry for them, which is fine and they’re not asking to be felt sorry for, but [the cap] is a change.”
Mr Hutton said while accountants have been proactive in contacting clients about the transfer cap, which comes into effect this July, clients do not want to have in-depth discussions about the matter.
“If someone does have three million in their super account, it does mean that [come] 1 July, 1.4 million dollars will have to be transferred into an accumulation account in their superannuation, and they’ll pay 15 per cent taxable earnings on that part of their superannuation,” he said.
“To a tee, every client I explain that to has said, ‘Oh, that’s okay’. People aren’t too deterred about that. I think when you actually speak to them and say you’re actually still getting a good deal, your earnings on your super are still tax free, for the first $1.6 million, it’s only that extra $1.4 million that you’ll end up paying 15 per cent tax on the earnings, that’s fine.”