SMSF members hold a number of advantages over other superannuation structures via their direct involvement with their fund, including the ability to closely monitor employer contributions, according to the SMSF Association.
In the wake of industry concerns about large amounts of compulsory super not being paid to employees, association chief executive Andrea Slattery said the non-payment of contributions was far less likely to be an issue for the SMSF sector.
“SMSF trustees and members have direct access and knowledge of their fund’s bank account, allowing them to directly monitor employer contributions to their SMSF,” Slattery said.
“Based on significant research and empirical evidence, SMSF members are generally more engaged with direct administration and management of their super, and, as a consequence, are more aware of the contributions being made to their fund.
“Discussing this issue with SMSF specialists would certainly suggest non-payment of employer contributions is not a problem in the SMSF sector to the degree it is for members of Australian Prudential Regulation Authority-regulated funds, as outlined recently by the industry funds sector.”
However if an issue arose, it was usually identified very quickly, she added.
She said compulsory super was a key pillar of the Australian retirement income system and together with voluntary contributions contributed to people achieving a secure and dignified retirement.
“As the non-payment of compulsory super to employees can have a severe impact on people’s capacity to save for retirement, it’s imperative that this issue is addressed immediately,” she noted.
“Certainly the association will support moves to tighten up the system to ensure employers meet their legal obligations.”
The issue of non-payment of large amounts of compulsory super within the industry funds sector is currently the subject of a Senate Standing Committee on Economics inquiry.