Retirement ‘boost’ schemes to punch $480m hole in federal budget

Detailed summary

The schemes, widely labelled as “pension bonus” or “boost” offerings – make up nearly $21.5 billion of assets under management at prominent super fund providers.

Popular products designed to artificially trim superannuation balances and max out pension entitlements will punch a $480 million hole in the federal budget between now and 2036, costing taxpayers another $250 million the year after and doubling from there, according to Treasury forecasts.

The projections, relayed to The Australian Financial Review, will put the $4.8 trillion sector on notice for an imminent crackdown. Wealth managers are braced for changes to these schemes – widely labelled as “pension bonus” or “boost” offerings – which make up nearly $21.5 billion of assets under management at prominent groups such as AMP, MLC and Colonial First State.

Opening of the article, excerpted from Australian Financial Review. To read the rest, open the article on the publisher's site.