A visiting professor from the University of NSW yesterday told delegates at the Self-Managed Superannuation Association of Australia (SPAA) conference in Adelaide that it was not appropriate to have an unlimited tax-exempt pension.
"I think the time has come to revisit a remarkably generous provision," he said. "It does seem wrong that relatively young and healthy people should be allowed to take out all money and spend it and then rely on the aged pension."
Cooper's submission was that in the shadow of the global financial crisis, the tax-exempt amount of a pension should be accepted by reference to average weekly ordinary time earnings (AWOTE).
Furthermore, he suggested the tax-exempt income and capital gains arising from assets supporting a pension should also be capped by reference to AWOTE.
Cooper had 18 submissions on technical aspects and some larger issues within SMSFs which he believed should be changed, broadly covering the areas of contributions, death benefits, investments and pensions.
On the topic of death benefits, Cooper said he believed some current rulings had unintended consequences.
"When a death benefit is paid to a non-dependent, we all know that in those circumstances there is a tax liability," Cooper said.
"Last year (Superannuation Minister) Sherry said the government was aware of that and there is no way the government will change their policy.
"We do have a form of death tax and it should be abolished."
