Technical and assumptions update (Tasman v3)

Please refresh your results for active cases

This release includes a technical update, so if you have any existing cases in progress, we recommend clicking the Start solve button again for any scenarios where you created results on or before the release on 23 June 2021. This will ensure that all your scenarios are consistent. Note that the numbers in your results may change when you re-solve, but it is better to be consistent across scenarios and use the latest legislation. If you are unsure when your results were created, see How to check when your results were created.

Technical update - cut-off age for bring-forward rule increased

Technical updates are applied to all cases, so it is strongly recommended you resolve all scenarios in any active cases to refresh the results, and make sure all scenarios are using the same technical details.

According to the new law, Treasury Laws Amendment (More Flexible Superannuation) Bill 2020, individuals under 67 years of age may access the bring forward non-concessional contributions cap in a particular financial year. This will apply to non-concessional contributions made on or after 1 July 2020.

Correspondingly, this update includes an increase in the age that individuals may access the bring forward rule, to under 67 years old (previously under 65 years old) from FY 2021 onwards.

Assumptions update - changes to assumed returns for shares/managed funds and Australian bonds

These new values will apply to any cases created on or after 23 June 2021. If you created your case before then, then the older values will be continue to be used. Please Contact Optimo Financial if you would like to update your case to use the new assumptions. To check what assumptions are being used in your case, on the home page, select the case and check the "Global assumptions version".  As of 23 June 2021, the latest assumptions version is 6.xml, so any number lower than that is using an older version of the assumptions.

The default returns for some shares/manged funds profiles and Australian bonds have been updated, as listed below.  Please note that that:

• These are projected returns for the long run (more than 10 years) and do not necessarily reflect near term returns

• Projected returns for Secure and Defensive categories have been adjusted upwards mainly to reflect expected higher interest rates in the long term

• Projected returns for Balanced, Growth, High Growth and Australian equities have been adjusted downwards mainly to reflect lower expected returns for equities in the long term

Please note that these are suggested defaults.  If you would like to change them, see How to see and edit the assumptions. For the full list of assumptions, please see Optimo Financial Default Assumptions

Shares/managed funds

Note:

• All values listed in the table below are %pa

• The following terms refer to retail and industry super funds:

  • 'Super' is for returns in the accumulation and TRIS phase (after tax and fees)

  • 'Pension' is for returns in the pension phase (after fees)

• The following terms refer to shares/managed funds owned by individuals or SMSF:

  • Growth

  • Distribution

Australian bonds (under 'Fixed interest')

Other news

SMSFs with five or six members not fully implemented

As noted in 'Treasury Laws Amendment (Self Managed Superannuation Funds) Bill 2020', from 1 July 2021, SMSFs will be allowed to have six members (increased from four members). However, please note that in Pathfinder you should consider cases with more than two people as outside scope of the websolve, although you can submit them to the Optimo Financial SDS.

However, if you do not want to use the SDS, then please note that at this stage in Pathfinder, it is possible to model an SMSF with six members, however, you should:

• Check the results carefully

• Note that in the results, some individuals may be listed as owning assets even if their ownership percentage of an item is 0% (so you will have empty reports or action items that mention them in relation to an asset they do not actually own

• Be aware that cases with more than three or more individuals may solve more slowly

Since this rule is relatively new, we are still considering how to prioritise implementing this fully.  Don't hesitate to fill in our Feedback form if this is a feature you're interested in.

Pending Budget 2021/22 changes

We are also keeping an eye on other legislation that has been introduced from the 2021/22 budget and we will update them Pathfinder as soon as it is passed in both houses and given Royal Assent.