Super exemptions will be 'a total dog's breakfast', say advisers

In each case, you can bet that there will individuals searching for strategies to get around the rules.

One irate adviser called the carve out suggestion "a total dog's breakfast", before later concluding it was "dumb, dumber and dumbest".

Claire Mackay, of Quantum Financial, was more polite. "As a community I would like to think we are not encouraging divorce. But you can't blame people looking at strategies to help them have a dignified retirement," she said on Friday.

Furthermore, when it comes to super rules, a little bit of black and white is no bad thing. Introducing exemptions would make the retirement savings system a more complicated beast to navigate and would only confuse savers, who by and large have better things to do than spend hour upon hour getting their heads around retirement saving regulations.

As a general rule, the more restrictions that are placed around a law, the more complex that law becomes and the more difficult it becomes for consumers to comply with.

There are, of course, a couple of groups of people who stand to benefit from any modifying of the rules along the government's proposed lines. Financial planners and lawyers are two that immediately spring to mind. As one executive in the advice industry said on Friday: "Increasing complexity means more appetite for advice."

Arguably, if the government believes that exemptions are necessary, it is a sign that the measure is not right in the first place. If that indeed is the internal thinking, raising the lifetime contributions ceiling to beyond $500,000 would be a far simpler, cleaner solution. Piecemeal measures such as introducing carve outs for certain groups of individuals is a clumsy way of solving the problem, assuming there is one.

The other point about the proposed exemptions is that they do not address the issue relating to the lifetime cap that riles the wealth industry the most – the fact that the $500,000 ceiling takes in after-tax contributions made since July 2007 and in doing so disrupted many savers' retirement savings plans.

But perhaps there is a silver lining. At least the timing of the government's proposal for carve outs is handy. In the next couple of weeks Treasury is due to begin consultation with the industry on the May budget measures, so this will give super sector executives time to gather their thoughts before formal meetings get under way.

In the meantime the disgruntled MPs who blame super in part for the Coalition's poor performance at the poll earlier this month might like to start thinking about alternative amendments to the Prime Minister's super reforms if they want to make their stamp on the legislation. When doing so, they might like to bear in mind that simplicity is a big plus.