The higher superannuation concessional contributions caps for people who are over the age of 50 and have a retirement savings balance under $500,000 may result in a significant administration burden for the Australian Taxation Office (ATO) as well as fund members, according to OnePath technical services manager Graeme Colley.
The increased level of administration Colley is referring to stems from the $500,000 threshold set by the government in the 2010 Federal Budget.
"The recording of this information is massive. If there are 30 million superannuation accounts in Australia then the ATO is going to have to record 30 million balances to police this," Colley said.
"Depending on what option is used by the government, if withdrawals are included in the $500,000 balance, there are a lot more of those transactions that have happened. We've got clients who have been drawing pensions for 15 to 20 years so will that information have to be recorded?" he said.
"You would hope not and you wouldn't think so but it would require a massive administrative effort from the ATO and for other organisations."
The issue of when the $500,000 threshold will be measured from is still being debated and Colley said the eventual result here could mean more work for certain fund members, in particular those in self-managed super funds.
"If the rule comes in for the 2012/13 year and the balance they use starts way back in 2010 or 2011, and they've valued the assets of the self-managed fund at cost, then the trustees are going to have go back and get a valuation of the assets at that time," he explained.
"That's not a problem for shares but it could be a problem for collectables or property in the super fund. Things that are difficult to value," Colley said.
