SuperUpdate December 2011

Fund-capped contributions

Some funds are failing to return the amount of a fund-capped contribution in excess of the member's fund-capped contribution limit within the 30-day limit.

You must return the amount even if it is more than 30 days since you became aware of the inconsistency. Delays in returning the amounts may expose the fund to liability for any losses incurred while the amounts are held in the fund.

Fund-capped contributions are member contributions other than those specified in sub-regulation 7.04(7).

The fund-capped contribution limit is:

• three times the non-concessional contributions cap - for members 64 years old or under on 1 July of the financial year
• the non-concessional contributions cap - for members 65 years old or over but under 75 on 1 July of the financial year
• fund-capped contributions generally count towards the member's non-concessional contributions cap. This cap is currently $150,000 or $450,000 over three years if the individual is eligible to 'bring-forward' their non-concessional contributions.

If a member attempts to make a single contribution that exceeds these limits, you must not accept the excess amount. If you find you have accepted such a contribution, you must return the excess amount to the member within 30 days of becoming aware the contribution was made. However, any failure to comply with the time limit does not affect your legal obligation to return the contribution. The 30-day limit is a period of grace for you to remove the contribution from the super system without breaching the rules. Once the time limit expires, you will be in breach of the rules.

Member contributions are all contributions made for or by a member, excluding employer contributions. There are some member contributions, specified in regulation 7.04, that are not fund-capped contributions and, therefore, not subject to the limits. You must manage your obligations and ensure your systems and practices allow you to distinguish between different types of member contributions.

For more information about contributions reporting and re-reporting, refer to the member contributions statement (MCS) protocol.

Sections within Check your controls for acceptance of contributions

• Fund-capped contributions