The growth in the number of SMSFs has slowed, particularly in the past 12 months, as the sector bears the brunt of the super reforms announced in the 2016 federal budget.
At the recent Class Connect 2018 conference in Sydney, Class Super chief executive Kevin Bungard presented figures from the Australian Prudential Regulation Authority and ATO that defied numbers from September 2017 that predicted the sector would hit 600,000 SMSFs.
Bungard said the sector is just shy of that target, with initial reported figures showing there were 596,225 funds.
However, revised figures as at 31 March revealed there were 595,840 funds, after the ATO cancelled around 8800 SMSFs last year, which accounts for the dip in that time period.
“The ATO had worked out [some funds] had probably been sitting around for a number of years with no assets so they’ve never lodged a tax return. As far as anybody could tell they didn’t have any assets so they just cancelled them,” Bungard said.
Professional services firm KPMG had projected the number of SMSFs to grow to 700,000 in the next five years, but this is optimistic based on trends over the past 12 months, he said.
He further noted there are currently 5000 funds whose status says they have been elected for regulation, adding this “is really quite odd”.
“We were looking at this in regard to the SuperStream rollovers that are coming. One of the things that will need to happen is that in order to receive a rollover, that SMSF is going to need to actually have the right status,” he said.
“That’s showing up in our numbers because we’re doing some work at the moment to map to see that our funds would actually be able to receive contributions when the SuperStream rollovers come in and that statuses are not kind of lining up.”
Current estimates indicate the industry growth rate for the number of funds could sit around 2.3 per cent, but those using Class are growing at nearly three times that rate at 6.5 per cent, he said.
“So how is it that you’re doing that? Pretty sure you’re not going out and setting up more funds than anybody else, establishing funds. You’re doing it by basically taking funds away from the competition,” he said.
