The ability to service six-members in an SMSF moved a step closer to reality today with the Senate approving a bill to allow their creation 10 months after the proposed legislation was first introduced.
The approval took place as parliament also passed two other superannuation bills that will extend the non-concessional contribution bring-forward rule to individuals aged 65 and 66 and allow the stapling of funds to members.
The approval of the Treasury Laws Amendment (Self Managed Superannuation Funds) Bill 2020, which will amend the Superannuation Industry (Supervision) Act to increase the maximum number of allowable members from four to six in an SMSF, means the bill will now move to the House of Representatives for approval before it can be passed and given royal assent.
The bill was first introduced into the Senate on 2 September 2020 where it was read for a first time before being moved for a second reading, which eventually took place today, followed by a debate in the Senate chamber and a third reading, which progresses the bill to the lower house.
The SMSF Association noted the approval of the bill, stating via Twitter: “The SMSF Association has previously supported six-member funds. While we don’t expect this change will lead to a significant increase in the number of SMSFs being established, [it] will provide greater investment flexibility, choice and lower fees for those in a position to utilise it.”
In related news, parliament also passed the Treasury Laws Amendment (More Flexible Superannuation) Bill 2020, which will amend the Income Tax Assessment Act to enable individuals aged 65 and 66 to make up to three years of non-concessional super contributions under the bring-forward rule.
This bill, introduced into the lower house on 13 May 2020, progressed to the upper house by 31 August 2020 to await a second reading, which took place today, and following two amendments by Pauline Hanson’s One Nation, received a third reading.
The amendments will remove charges for excess concessional contributions for some superannuation fund members and will allow the re-contribution of COVID-19 early release amounts up to the level of funds withdrawn from super under the relief measure.
In addition, parliament passed the Treasury Laws Amendment (Your Future, Your Super) Bill 2021, which contains a number of measures outlined in the 2021 budget, including stapling funds to members, a requirement that the Australian Prudential Regulation Authority conduct an annual performance test for MySuper products and the introduction of a best financial interest duty for the trustees of superannuation funds.
Late last week, the ATO released its time frames for the deployment of changes within its systems in response to the passing of legislation, stating that in July 2021 it would build and test functionality to enable an increase in fund membership from four to six and in July 2022 build changes into the SMSF annual return and correspondence to support a rise in membership from four to six for the 2022 financial year.
