The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.

Type Subject matter Source Description

Federal Parliament

Discussion paper: supervisory levies for 2018/19 financial year

Proposed Financial Institutions Supervisory Levies for 2018-19

On 11 May 2018, the Treasury released a discussion paper seeking "industry views on the proposed Financial Institutions Supervisory Levies…that will apply for the 2018–19 financial year". These levies will "recover the operational costs of [APRA], and other specific costs incurred by certain Commonwealth agencies and departments" (such as the ATO and ASIC). The paper includes the proposed levy calculations for superannuation funds. Comments on the discussion paper are due by 8 June 2018.

ATO

Transfer balance cap

ATO News: Transfer balance cap update

On 8 May 2018, the ATO advised that it has commenced issuing "commutation authorities to funds where a member has not commuted their income streams by the due date" as well as "excess transfer balance (ETB) tax notices of assessment to individuals". Around 550 commutation authorities and 1800 ETB notices have been sent over the past fortnight. According to the ATO, "ETB tax is calculated on excess transfer balance earnings from when the individual started to have an excess transfer balance to when the transfer balance account is no longer in excess. The tax rate is set at 15% for an excess transfer balance in 2017–18".

ATO Super Guarantee opt-out for high-income employees: Application for an exemption certificate

Preventing inadvertent concessional caps breaches by certain employees

On 9 May 2018, the ATO advised that from 1 July 2018, application forms will be available for the superannuation guarantee opt-out for high-income employees as announced by the Government in the Budget last week. According to the ATO, eligible individuals can choose to nominate that their wages from certain employers are not subject to the superannuation guarantee from 1 July 2018 if they expect their income will exceed $263,157 in a financial year. The ATO will then issue an exemption certificate to an employer, however it warned that "take-up of this arrangement and any changes to remuneration would need to be negotiated between the employees and the employers", as employers "can choose not to comply with the exemption certificate".

ATO Defined benefits super funds: election for non-deductible contributions ATO News: Elect or revoke election to be non-deductible before 1 July 2018

On 11 May 2018, the ATO issued a reminder to funds that those "which provide defined benefit interests can elect to treat member contributions as non-deductible" however funds must notify the ATO of their election (or revocation) before 1 July 2018 for it to apply in the 2018–19 calendar year. The ATO has noted that an election or revocation after this date will be invalid and a fund's current deductibility status "will remain for the 2018–19 income year. This means [the fund] may need to accept tax-deductible contributions from [its] members in the 2018–19 income year". According to the ATO, "[t]his election is only required once and the non-deductible status of the fund will remain in place for all future years unless validly revoked".