More consistent assessments of the returns and retirement expenses of SMSFs in comparison to Australian Prudential Regulation Authority (APRA)-regulated funds are not unreachable, with the prudential regulator already working on better analysis.
“There is still a difference between the way returns are calculated in APRA funds compared to SMSFs so hard comparisons can be difficult because of that,” SMSF Association head of technical Peter Hogan said.
“The Association of Superannuation Funds of Australia will presumably be operating on APRA numbers, as well as calculating the level of capital they’re suggesting people will need to have to fund their comfortable lifestyle in retirement.
“And these figures will be slightly different just because of the way [retirement] expenses are accounted for, as well as which expenses are taken into account and which aren’t.”
Hogan revealed the SMSF Association has been working closely with the ATO to achieve more consistency with how superannuation retirement figures are and can be calculated.
“I don’t think that anyone will ever be able to say that these numbers [for APRA funds and SMSFs] are identical, because they are different beasts,” he noted.
“But we are working towards getting more consistent analysis of returns and expenditure, and so on.”
Hogan’s comments come following the launch of a new report from the SMSF Association and Accurium.
The “SMSF Retirement Insights: SMSFs Treading Water” September 2017 report analysed Accurium’s database of over 65,000 SMSFs, approximately 130,000 trustees, during the 2016 financial year.
The database represents SMSF households that are in or phasing into retirement.
The sixth volume of the report revealed due to a weaker investment outlook that indicates returns will be lower for longer, SMSF retirees will need more savings to achieve their retirement goals.
