"Stronger Superannuation" Changes

The purpose of the Government's “Stronger Super” reforms is to make the Australian superannuation system stronger and more efficient, and to help maximise retirement income for members. Legislation to implement the “Stronger Super” reforms has been progressively introduced since 2011.

SMSF

The remaining measures will be introduced in several tranches over the coming months with the view to improve the integrity and increase community confidence in the SMSF sector. New commencement dates for SMSF Stronger Super measures are:

Some of the changes to take effect from 1 July 2012 ensure that a SMSF Trustee must:

1. Review your fund’s investment strategy on a regular basis and consider insurance for fund members as part of the fund’s investment strategy;
   
   With less than 13 per cent of SMSFs holding insurance for members, this recommendation aims to ensure that trustees appropriately consider the holding of insurance for all fund members. It is expected that trustees will evidence this requirement by documenting decisions in the fund's investment strategy or minutes of trustee meetings that are held during an income year.
2. Value the fund’s assets at market value when preparing financial accounts and statements for the 2012-13 income years and thereafter.
   
   Currently, SMSFs are generally able to choose either historical cost or market valuation methods to determine the value of fund assets when preparing financial statements.
3. Keep assets of the SMSF separate to any personal or Company assets.
   
   This has actually always been an obligation for trustees; however it is now a prescribed operating standard. This new regulation has made this requirement an operating standard, which gives the ATO the power to enforce compliance.
   
   A person who intentionally or recklessly contravenes this standard is guilty of an offence punishable on conviction by a fine not exceeding 100 penalty units (one penalty unit currently equals $110), therefore 100 penalty units equals $11,000).

These changes are looking to further improve integrity and confidence in the rapidly growing SMSF market.

For more information, contact Azure Group on 9238 1188.

This article is intended to provide general information only, and is not to be regarded as legal or financial advice. The content is based on current facts, circumstances, and assumptions, and its accuracy may be affected by changes in laws, regulations, or market conditions.  Accordingly, neither Azure Group Pty Ltd nor any member or employee of Azure Group or associated entities, undertakes responsibility arising in any way whatsoever to any persons in respect of this alert or any error or omissions herein, arising through negligence or otherwise howsoever caused. Readers are advised to consult with qualified professionals for advice specific to their situation before taking any action.