A new superannuation tax aimed at very wealthy Self Managed Super Funds (SMSFs) is set to impact far more people than initially expected. Industry analysis forecasts that at least half a million salaried workers will eventually be affected by this tax.
The tax’s unusual design—partly based on unrealised paper gains—and the government’s choice not to adjust the $3 million entry threshold for inflation mean the number of affected individuals will be widely debated.
However, it is clear that beyond SMSFs, the biggest impact will fall on super funds with the highest average member balances, especially those with many older, wealthier members.
Using data from the Australian Prudential Regulation Authority, Stockspot analyzed which funds are most at risk. The affected funds range from retail giants like Colonial First State First Choice to industry leaders such as Aware Super and corporate funds including Qantas Superannuation Plus.
Among retail funds, Colonial First State, Mercer Portfolio Service Super, and Russell Investment Master Trusts—popular with white-collar professionals—are prominent. Industry funds like AwareSuper (holding over $183 billion in assets), Equip Super, and NGS Super also face significant exposure.
Mercer Portfolio Service Super has the highest average member balance at $354,000. Historical context shows that the 2012 Division 293 tax was expected to affect 120,000 people but now impacts over 500,000. The current government estimates only 80,000 will be hit, but the Financial Services Council (FSC) projects 500,000 will be affected.
FSC CEO Blake Briggs urges the government to reconsider, warning against unfairly targeting future generations. The tax’s design means younger members in large funds may subsidize older, wealthier members, as all investors in pooled industry funds are taxed uniformly.
Stockspot CEO Chris Brycki highlighted that lower-balance members could be penalized despite the tax targeting the wealthy. Older members might avoid the tax by timing their asset sales correctly, leaving younger members to bear the burden.
AwareSuper CEO Deanne Stewart supports indexing the tax threshold to protect future generations but notes that most of AwareSuper’s 1.2 million members are frontline workers, with fewer than 300 accounts exceeding $3 million.
The list of 15 funds most at risk was created by combining average member balances, net benefit outflow ratios (indicating older members withdrawing funds), and total assets. The tax will also affect franked dividends and unrealised gains on assets, even those that previously recorded losses but are now recovering.
The Greens have pushed to lower the threshold from $3 million to $2 million and to index it for inflation. The 15% tax on earnings above $3 million starts collecting from July 1, 2026, with the tax effective from July 1 this year.
Read more:
