However, the debate about who wins and loses from the proposed changes will not be completely resolved until the detail of how the changes will be implemented is released, analysed and of course there remains the task of navigating the legislation through both houses of parliament before it becomes law.

The major change is the introduction of a 15% tax on income in the pension phase on income above $100,000.

The official announcement from the Minister for Financial Services and Superannuation, Bill Shorten, says that "from 1 July 2014, future earnings (such as dividends and interest) on assets supporting income streams will be tax free up to $100,000 a year. Earnings above $100,000 will be taxed at the same concessional rate of 15 per cent that applies to earnings in the accumulation phase".

In many ways the real value of the joint press release by Shorten and Treasurer Wayne Swan for super fund members was more what it ruled out given some of the more extreme tax options that had been floated publicly.

Gratefully, the great super debate of 2013 has delivered increased certainty on a number of fronts for fund members.

But the debate also underscored how superannuation has become a mainstream political issue -inevitable perhaps given the demographics at work and the growing pool of assets.

What is perhaps not so obvious from the changes is that the appeal of self-managed super funds is likely to get a further boost. For people with significant super balances the ability to have control over the portfolio - in particular the tax management of individual accounts - is likely to be increasingly attractive as portfolio management strategies are refined to take into account the detail of the proposed changes to tax income of members in pension mode.

The other certainty flowing from the super debate is that financial advisers and accountants will undoubtedly benefit from the increased complexity around the drawdown phase of managing their pension.

The package of super changes may be well-intentioned in terms of equity and sustainability but even without implementation detail no-one is suggesting it is simple.

Take the proposed capital gains arrangements that will apply for capital gains on assets purchased before 1 July 2014:

•    For assets that were purchased before 5 April 2013, the reform will only apply to capital gains that accrue after 1 July 2024.
•    For assets that are purchased from 5 April 2013 to 30 June 2014, individuals will have the choice of applying the reform to the entire capital gain, or only that part that accrues after 1 July 2014.
•    For assets that are purchased from 1 July 2014, the reform will apply to the entire capital gain.

That sort of tax complexity is the natural habitat of professional advisers.

Tax is a major cost and therefore an important input into investment decisions. The after tax return is clearly the most important because it is what you get to spend and fund your lifestyle with.

However, tax can also distort investment decisions - think forestry and film schemes - where the tax saving or deduction can compromise sensible investment portfolio construction rules based around risk, diversification and costs.

For example in the SMSF world at the moment there is a lot of discussion around limited recourse borrowing arrangements and the purchase of investment property.

The proposed tax changes on retirement income may challenge or alter the thinking around an SMSF portfolio in pension phase.

The simple characteristics of property investments are that they are lumpy, illiquid assets but under the existing rules with no tax on pension payments crystallising a large gain in a particular tax year was not a tax issue.

Consider a property bought today and sold in five years time for a healthy capital gain. The realised capital gain potentially could push the individual investor's income for that year above the $100,000 threshold - notwithstanding generous grandfathering provisions over the next 10 years.

Compare that to a portfolio of equivalent value of listed shares or managed funds where assets can be sold down proportionally in small lots rather than in one lump.

Liquidity has always been a consideration but the proposed new tax on income introduces a new planning consideration around flexibility and timing in the drawdown phase of retirement.

It is those types of subtleties about the asset mix, the interaction of tax with a drawdown strategy that will require careful analysis and planning.

For SMSF investors the good news is they have more flexibility and control when planning their drawdown strategies. The challenge is finding a professional adviser with the right specialist technical training and qualifications to navigate them through the revolving door of rule changes.

By Robin Bowerman
Smart Investing
Principal & Head of Retail, Vanguard Investments Australia
12th  April 2013