The SMSF Association is of the firm opinion SMSFs are the best structured retirement savings vehicle to accommodate the proposed changes to the system announced in the 2016 federal budget.
According to SMSF Association chief executive Andrea Slattery, when looking at the whole superannuation sector in light of the proposed changes, SMSFs would experience the least difficulties implementing the new amendments to the system.
“We’re not necessarily favouring one sector over another, it’s just that it’s much easier to do it in an SMSF than it is in another fund,” Slattery said.
SMSF Association head of technical Peter Hogan said it was the fact SMSFs were already dealing with the relevant issues and structures before the changes were even announced that gave them the implementation advantage over other types of super funds.
“Accountants and auditors are dealing with that issue now where they have a mixture of accumulation accounts and pension accounts inside a self-managed fund,” Hogan noted.
“It’s a well-trodden path.
“And with a self-managed super fund it is all within a single fund as opposed to being separate funds and separately calculating unit values and all those sorts of things that are in retail funds and other superannuation structures.”
Slattery pointed out SMSFs had an advantage in relation to one of the proposed changes in particular.
“So in that particular instance, that particular [change] around the $1.6 [million transfer balance cap], it’s very easy to do in an SMSF,” she said.
“The mechanisms are already set up and the advice is already set up.”
Hogan added the ease with which other types of super funds could implement the proposed system changes would depend on how they were structured.
“Some of the retail funds are set up where the pension account is in a separate superannuation arrangement to the accumulation account, some are in the same, and you’ve got life companies that have statutory funds, so it would be relatively straightforward to move assets between these types of funds,” he said.
