Less red tape and more flexibility would result from a decision to expand the number of members allowed in a self-managed super fund (SMSF) from four to six, the Federal Government says.
Speaking at an SMSF Expo in Melbourne, Revenue and Financial Services Minister Kelly O’Dwyer said that given recent growth in the sector, the move would “ensure SMSFs remain compelling retirement savings vehicles”.
In announcing that SuperStream (the system that transmits money and information across the super system between employers, funds, service providers and the ATO) would be extended to include SMSF rollovers, she said: “This reform will allow SMSF members to initiate and receive rollovers electronically between an APRA (Australian Prudential Regulation Authority) fund and their SMSF.
“This will reduce compliance costs, expedite the rollover process and further improve the integrity of the super system.”
Ms O’Dwyer said the reforms were expected to take effect late next year.
“We will have some further positive announcements in the Budget,” she said, but added that the Government had “no intention of making any further changes to the taxation of super”.
A spokesperson for the Association of Superannuation Funds of Australia (ASFA) said the proposed change would have no impact on an individual’s experience in setting up an SMSF.
“Any individuals wanting to start an SMSF will still be required to go through a rigorous process of establishing an SMSF and registering it with the ATO,” she said. “Once an SMSF is established, however, it will become easier and quicker for SMSF trustees to move monies between an SMSF and an APRA regulated fund.”
SMSF Association chief executive John Maroney said the group had lobbied for the changes for more than five years.
He said the expansion from four to six would benefit family groups that wanted to include parents, children and, potentially, children’s spouses in a single SMSF.
“Currently, family groups may need to have multiple SMSFs to accommodate more than four members, so this proposal will allow a single SMSF for the group, bringing the benefits of reduced costs and greater scale,” Mr Maroney said.
Including SMSF rollovers in SuperStream was a big improvement, he said.
“This change to the mechanics of the super system is important to SMSFs. Currently, SMSFs can experience lengthy delays in receiving rollovers from large superannuation funds, so this change will ensure rollovers are made in a timely manner, enhancing choice and efficiency in the superannuation system.
“This will minimise friction between various parts of the super system and also reduce the time it takes for SMSF members to access their retirement savings held in large funds.”
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