The Self-managed Independent Superannuation Funds Association (SISFA) has revealed it will offer an exclusive insurance product built into its membership, with the initiative expected to be launched in the new year.
“This will be an insurance product to cover the cost of tax audits and any liabilities from failing to comply with section 166 of the Superannuation Industry (Supervision) Act (SIS Act),” SISFA managing director Mike Goodall told selfmanagedsuper.
“We know it will be a unique offering in the marketplace for trustees and it will be incorporated into the membership fee – it won’t be something that people will pay extra for.
“There will be a two-person trustee SMSF membership and a larger corporate membership, as well as the practitioner membership we have now, but we’re currently restructuring our memberships and reducing the fee.”
Section 166 of the SIS Act covers the administration penalties in relation to SMSFs where they have contravened a provision of the act.
At the 8th Annual SISFA SMSF Forum in Melbourne last Friday, CoreSuper Insurance managing director Trevor Turner said that with trustee self-education, the misunderstanding and misinterpretation of compliance and regulations was commonplace.
“Now with the new super measures we’ve got increased complications and increased difficulties, and with that the potential for increased breaches,” Turner said.
“The insurance product has been specifically designed for SISFA, who is the policy owners, with Hollard Insurance as the underwriter.”
By joining SISFA, trustees will have an automatic insurance cover within their membership.
It will consist of two insurance covers: Trustees Administration Penalty Liability Insurance and SMSF Audit Insurance, Turner said.
“The Trustees Administration Penalty Liability Insurance you may have seen through underwriters, but this is a brand new offering and SISFA will be the first one to bring it to market,” he said.
“This allows trustees to put their hand up early and hopefully get a better deal with the ATO, so that in itself is a significant benefit.”
Goodall said the insurance was one component of member benefits and member categories currently under development at SISFA.
“What the industry has not been successful at doing is creating greater engagement with mum and dad trustees and demonstrate the value of the advocacy that we undertake to represent them to government and regulators,” he noted.
“We clearly need to be more responsive to both our professional practitioner members and our trustee members as well, and we’re keen to use this to help drive the membership of SISFA.
“Ultimately, what we’ll look to do is tailor our offering to mum and dad trustees, and therefore the self-education aspects we can help them with and where they can get good advice for matters relating to their SMSF.”