The ATO has revealed instances of non-compliance with superannuation legislation and regulations among SMSF trustees have risen as indicated by the number of auditor contravention reports (ACR) it has received over the past few years.
“What our data is telling us is that there is an upward trend in contravention reporting. In the last three years, the rate has gone from 2.5 per cent of all funds, in terms of [the reporting of at least one contravention], to almost 3 per cent,” ATO acting deputy commissioner Paul Delahunty confirmed during a presentation at The Tax Institute National Superannuation Conference held recently in Sydney.
Delahunty pointed out that while the trend is evident, the result needed to be assessed taking into account the entire SMSF sector.
“I think it’s important to recognise [non-compliance] is still at a healthy level at 3 per cent. And that is in itself reflective of a compliant sector,” he explained.
“But the increase does suggest that there may be a level of non-compliance that we’re starting to see emerge.”
Further, he noted the situation is not as concerning as it may appear at face value due to the proactivity of a large number of the trustees involved.
“What is pleasing is the auditors are telling us 45 per cent of those contraventions that are reported are [recognised as having been] rectified,” he noted.
He took the opportunity to acknowledge the specific areas with which trustees are struggling in terms of their legal obligations.
“In terms of what is being reported, we do receive contravention reports on a myriad of SIS (Superannuation Industry (Supervision)) breaches,” he explained.
“They often overlap, but the main types of contraventions we say would be classified [in the following categories:] 15 per cent in that administrative contravention category, 15 per cent associated with loans or illegal early access and 11 per cent for in-house asset and sole purpose contraventions.”
