SPAA calls for a level playing field for SMSFs versus other super funds
The Self Managed Super Fund Professionals’ Association (SPAA) has today expressed disappointment about a key aspect of the Federal Government’s Stronger Super Reforms announced today, in particular, that a ban on off market transfers will apply to self managed super funds.
SPAA recommended that best practice guidelines for all super funds would be more appropriate. However, SPAA is pleased the Government has adopted SPAA’s common sense approach to auditor independence measures for SMSFs.
Under the package of measures announced today, all off market transfers between SMSFs and related parties must be conducted on market where a ready market exists to remove any potential for manipulation of Capital Gains Tax or Excess Contributions Tax.
“Generally, we welcome the tone and detail of the Stronger Super measures announced today as they confirm the Cooper Review conclusion that the self managed super fund sector is both successful and robustly regulated,” said Andrea Slattery, SPAA CEO.
“However SPAA is concerned about the new requirement for related party transactions to be conducted on a market where one exists. While we support the Federal Government’s aims to maintain appropriate oversight of SMSF service providers, ensure fund investments are consistent with the purpose of superannuation and curb fraudulent activity, we note that APRA regulated funds can still conduct off market transfers and nominate a transfer date, therefore potential for manipulation remains,” she said.
“We believe the ban on off market transfers for SMSFs places the SMSF sector at a significant disadvantage compared to other superannuation funds,” Mrs Slattery said.
SPAA said a best practice guideline for all funds would have been a more appropriate way of reducing the potential risk of price and date manipulation.
“We note that the Government has committed to prudential standards for APRA regulated super funds regarding off market transfers and a review of extending the ban to Small APRA Funds,” she said.
Separately in Stronger Super, SPAA is pleased that recommendations regarding auditor independence have been adopted, in particular, that existing independence requirements imposed by the Australian Professional and Ethical Standards Board (APESB) under APES 110 are appropriate for SMSF auditors. Under the recommendation, the APESB will develop guideline materials specifically for SMSF auditors which auditors will have to meet as part of their ongoing registration requirements.
“We are very pleased about the approach taken to auditor independence which is sensible, workable and a significant improvement on the more prescriptive approach recommended by the Cooper Review,” Mrs Slattery said.
Mrs Slattery noted that the Government has endorsed the other recommendations and welcomed the rejection of standard deeming provisions to automatically deem anything permitted by the superannuation or tax legislation to be permitted by SMSF trust deeds.
“SPAA and its members eagerly await the outcome of decisions on the accountants’ exemption and auditor registration as these are critical to providing certainty for the SMSF sector,” Mrs Slattery said.
