The SMSF Professionals’ Association of Australia (SPAA) has strongly rejected claims SMSFs do not provide the same level of asset allocation information as larger Australian Prudential Regulation Authority (APRA)-regulated funds, making it difficult to assess the extent of any risks in the system.
SPAA chief executive Andrea Slattery said the claims, which emerged in a submission to the Financial System Inquiry, were spurious.
“This really is a case of the pot calling the kettle black and is so far removed from the reality,” Slattery said.
“Look at the annual returns required to be completed by SMSFs and APRA-regulated funds and it’s easy to see which sector provides the greater level of detail – it’s all in there in the Australian Taxation Office (ATO) files, SMSF by SMSF.”
ATO reports on SMSFs not only disclosed the number of new funds, details about members, their ages and how much they were earning, but also disclosed information about the funds’ investments split into 19 investment categories, she said.
“By contrast, APRA-regulated funds report under the cover of broad aggregates that reveal nothing specific about their asset allocation,” she said.
“Significantly, overseas superannuation funds that are much larger than their Australian counterparts currently provide significant and specific information as part of a continuous disclosure regime that enables their members to gain immediate access to fund investment allocations on a daily basis.”
In addition, changes to reporting investment allocations by APRA were highlighted in its last quarterly report and showed the aggregates of all fund assets, as well as the number of entities with more than four members, she said.
“This broad level of detail provides less insight into APRA-regulated funds than previously reported,” she said.
“Now this broad information will have to be reported annually, although this still lags the SMSF sector where significant levels of detail are reported quarterly and annually in a transparent and comprehensive way by the ATO.
“The fact is that there has been huge resistance to APRA-regulated funds, even after the current superannuation system has been operating for more than two decades, to disclose their investments. This is something that they will need to do, to some degree, in the future.”
