Simpler super - defined benefit funds

Contributions made into defined benefit funds are not always linked to individual members. The concessional contributions amount for a member of a defined benefit fund is not calculated on the actual contributions made to the fund but on ‘notional taxed contributions’.

The method for calculating ‘notional taxed contributions’ will be set out in regulations to the simpler super legislation. These regulations have not yet been made.

Transitional arrangement

A transitional arrangement applies to people who were members of defined benefit funds on 5 September 2006.

Under this transitional arrangement, notional taxed contributions that exceed the concessional contributions cap will be treated as though they are equal to the cap. This means that members will not be liable for excess contributions tax on these contributions.

This transitional arrangement may cease to apply if the fund makes changes to its rules. Particular changes to the rules will still allow the transitional arrangements to continue. These will be detailed in the regulations. The regulations have not yet been made.

If a member transfers from a defined benefit fund to another defined benefit fund, the regulations may also allow for ‘grandfathered’ arrangements. This means the member would retain the transitional arrangement in the new fund.

As at 9 March 2007 the regulations outlining the detailed transitional arrangements and method for calculating notional taxed contributions have not been released. This fact sheet is only intended to provide guidance on the operation of the law.

More information

To obtain a copy of our publications or for more information:

    Australian Taxation Office
    PO Box 3100
    PENRITH NSW 2740

If you do not speak English well and want to talk to a tax officer, phone the Translating and Interpreting Service on 13 14 50 for help with your call.

If you have a hearing or speech impairment and have access to appropriate TTY or modem equipment, phone 13 36 77. If you do not have access to TTY or modem equipment, phone the Speech to Speech Relay Service on 1300 555 727.

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