We believe a simpler approach may be for the government to say that a superannuation fund member cannot have an account balance of more than $10 million unless that person is in receipt of structured settlement contributions, personal injury orders or total and permanent disablement benefits.

In effect those who have account balances of more than $10 million would be required to withdraw that money from the superannuation system.  They should be required to do this over a three year period or longer if the Australian Taxation Office (ATO) approves.  Any benefits should be tax-free to the recipient and Capital Gains Tax should not have to be paid by the superannuation fund when disposing of an asset in order to make this benefit payment.

There are other policy issues that would need to be thought about in relation to this policy proposal.  For example, there is an argument for saying that those already with a high superannuation balance should be quarantined from a compulsory withdrawal requirement.

And if such a policy were to be introduced it should only take effect after a reasonable transition period.

We would be happy to talk to Treasury about this policy.