New ATO figures shows no correlation of increased risk in SMSFs that hold very high balances compared to their Australian Prudential Regulation Authority (APRA) fund counterparts.
During a panel discussion with industry regulators at the SMSF Association 2017 National Conference in Melbourne today, ATO commissioner of taxation Chris Jordan said high balance super funds are reviewed closely by the regulator.
“The majority of SMSFs, as we know, have a reasonable balance and there are very few – just a handful of funds – that have a big profile and high publicity that were outrageous. But they’re [owned by] old males who had put money in decades ago and, I’ve said before, they will die off,” Jordan explained.
“Over the course of last year, there was an increase of 300 SMSFs with assets in excess of $10 million, which takes it up to 2500 – so there are 2500 SMSFs out of a total of over 580,000 with assets over $10 million.”
SMSF Association chief executive Andrea Slattery added that most of these funds had the full four members in them.
“So we’re not talking about individual balances here,” she said.
Jordan also revealed that according to ATO data, there are around 5000 SMSF members out of 1.1 million who have a balance of over $5 million, compared to 400 APRA fund members who have a balance of over $5 million.
“So again, those are the funds that are getting all the attention but we’re talking about 5000 out of 1.1 million members,” Jordan said.
“The last figure we have is that there are around 1400 individuals with combined APRA and SMSF balances that are over $5 million. That’s quite a small slice.
“Those SMSFs on the larger size put things in there a long, long time ago and locked it up – they had sufficient funds at the time and were willing to lock up that money for decades and it did grow, and they tend to be people in their 80s.
“But now we have a whole new set of bills that will make sure that doesn’t happen [anymore] – the limits and the caps, and all sorts of other things.”
Slattery noted that the SMSF structure was established in the 1940s, compared to other funds, which were introduced later.
“It’s actually really important [to know these figures] because we’ve never really been able to find out – with the APRA numbers, this is the first time it’s been publicly acknowledged,” she said.
“So it’s important to understand large balances occur across the super industry and is not just an SMSF benefit or win.”