People who manage their own retirement funds could feel forced to sell small businesses, property and private investments if a limit is imposed on the amount of super that attracts tax concessions, an industry group says.
SMSF Association CEO John Maroney says ongoing confusion over super caps harms investor confidence.ongoing confusion over one
These people are a minority of super fund members nationally, but their savings account for more than a quarter of the funds under management in the broader superannuation system, and a significant portion of these are in illiquid assets such as property.“If you’re forcing money out of the system, you’re going to have real issues with funds that have money in unlisted assets, especially [non-residential property] in the regions.
And any sweeping changes to superannuation by Labor, after it pledged during last year’s election to avoid significant reform to the system, would make SMSF members nervous about investing their savings in the future, he added. Revenue from sales would probably be invested in term deposits until the policy landscape cleared up, he said, which would generate less profit than the original assets, damaging the economy and increasing the chances that members would need to claim the age pension in retirement.The “risk that once a cap is in there it can get reduced” would also dampen SMSF members’ appetite for investment, he said, out of fear they would be forced to liquidate assets down the road.
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