ExxonMobil Super Plan Compromise Benefit

Situation:

The ExxonMobil Super Fund has reached a compromise agreement in relation to the dispute over the benefits payable by the fund.

The Facts:

• A problem was created with the calculation of Benefits when the Super Fund Trust Deed (Rules of the Fund) was changed in 1990
• A settlement has been agreed upon and requires court approval to be implemented.
• The Compromise Agreement will result in a benefit being payable to your Superannuation Fund account.
• The payment from the Compromise Agreement will increase your notional employer contribution and may result in you exceeding your super contribution limits.
• This could lead to Excess Contributions Tax being charged by the Australian Tax Office (ATO).
• This could relate to prior years and the current year.
• Exxon have agreed to reimburse excess tax that may be payable provided you follow the process that they require.

What you need to think about:

• Exxon Mobil will cease your salary sacrifice contributions as at 1 July 2010. How will this impact your tax position and can it be improved?
• Where will you direct/invest any surplus cashflow as a result of the reduced salary sacrifice?
• Once the compromise calculation has been made and you are able to begin salary sacrificing again, how much will you have to salary sacrifice from 1 January 2011 to ensure a favourable tax outcome for the full 2011 year?
• If I have an Excess Contribution Assessment what is the process to potentially have it waived?
• Your salary sacrifice will then have to be adjusted again in July 2011 to get the amount correct for the 2012 year.

Who can help:

• Our Financial Planners Ben Lancaster and Gary Lucas are available to discuss how the agreement will affect you.
• The Accountants at MG Financial Group can also help you with any individual dealings with the Australian Taxation Office regarding potential excess contribution assessments.

If you would like to discuss your situation specifically, please contact us today.