Legislation that would allow trustees to create to six member SMSF has passed through parliament and is expected to receive royal assent within days, resulting in the change becoming effective from 1 July.
The Treasury Laws Amendment (Self Managed Superannuation Funds) Bill 2020, which will amend the Superannuation Industry (Supervision) Act to increase the maximum allowable number of members in an SMSF from four to six, progressed through both houses of parliament without amendments on 17 June.
If the bill receives royal assent by 30 June, this measure will take effect from 1 July, which will be the start of the first quarter after royal assent has been received.
Labor attempted to amend the bill in the Senate, calling for a review of the operation of the changes in 12 months that would examine the conduct of financial advisers and trustees and the performance and governance of SMSFs.
In calling for the amendment, Senator Jenny McAllister said the “people who will benefit most from these arrangements are financial advisers giving shonky advice”.
That view was rejected by Superannuation, Financial Services and the Digital Economy Minister Jane Hume and the Association of Financial Advisers, which labelled the statement as part of the ongoing vilification of advisers.
The passing of the legislation, which was introduced into parliament 10 months ago after being first announced in 2018, was welcomed by the SMSF Association, which admitted the use of six-member funds was unlikely to be widespread, but would benefit large families seeking to create an SMSF.
Association chief executive John Maroney said: “We believe this increase from four to six will provide additional flexibility and choice in the superannuation system for those wanting to use it.
“It may also lead to lower superannuation fees and could improve the ability to pool balances and invest in a greater choice of assets, as well as assist with estate planning.
“Although the association does not believe there will be a significant number of SMSFs using this legislation, it will undoubtedly benefit some larger families.”
The Treasury Laws Amendment (Self Managed Superannuation Funds) Bill was one of three bills relating to super to be passed by parliament on the same day, with the Treasury Laws Amendment (Your Future, Your Super) Bill 2021 also being approved by both houses.
This bill will enact 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.
Its passage was welcomed by the Financial Services Council (FSC), which called the bill a “significant win for superannuation consumers”.
FSC chief executive Sally Loane said: “Our analysis shows that having a single superannuation account will save Australian workers up to $1.8 billion in fees over the first three years.
“This is an important milestone in our $3 trillion mandatory system, ending the scourge of unintended multiple superannuation accounts, which have cost Australians billions of dollars in duplicate fees.”
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.