The SMSF Association has thrown its support behind the Australian Law Reform Commission’s (ALRC) recommendations in its final report on elder abuse as they encompass positive steps towards helping to mitigate possible risks faced by ageing SMSF members.
The “Elder Abuse – A National Legal Response” report was labelled by the association as a measured approach to an issue the ALRC acknowledged was currently only a minor problem but had the potential to grow with 55 per cent of SMSF members aged between 55 and 75.
“In our opinion, the ALRC has found the right balance with its suggested reforms between mitigating this emerging risk without placing overly draconian restrictions on how the SMSF sector is regulated,” SMSF Association chief executive John Maroney said.
“In adopting this sensible approach, the ALRC has picked up on the key recommendations in the association’s submission to the commission, as well as in our detailed discussions with it on this critical issue.
“In essence, it involves changes to the superannuation laws to ensure that trustees consider planning for the loss of capacity of an SMSF member and estate planning as part of a fund’s investment strategy, and for the ATO to be told when an individual becomes a trustee of an SMSF because of an enduring power of attorney (EPOA).”
Maroney said the investment strategy recommendation would ensure SMSF trustees and their specialist advisers could give greater thought to planning for the loss of capacity and ensuring the right people were assisting SMSF trustees with their fund as they aged.
He added the association also supported the reform to provide replaceable rules in the limited circumstances where an SMSF trust deed did not appropriately allow a new trustee to be added to a fund where an EPOA was required to be used.
“Similarly, we support the ALRC’s call for a review of the laws regarding binding death benefit nominations for super fund members, acknowledging that this is an area of the law that is seeing more disputes among a deceased’s beneficiaries and relatives,” he said.
The ALRC’s recommendations to increase oversight of the use of EPOAs and create a national plan and study of elder abuse were also backed by the association.
“This report is an important step forward in combating elder abuse and we look forward to working with the government in implementing the ALRC’s recommendations,” Maroney added.
