The self-managed superannuation industry has welcomed the Government’s response to the Cooper Review, with finance minister Bill Shorten announcing that no major changes will made to the sector and that personal assets will still be allowed.
Industry experts have also welcomed a push for the Australian Securities and Investments Commission to require SMSF auditors to be listed on a register, but have said more discussion is needed about the detail before any final plan is put into place.
The Government announced today that while it will adopt a recommendation to develop a new “default” super program called MySuper, the DIY-super industry is performing well and no major changes well be required.
This lines up with the Cooper Report itself, which states that, “the SMSF sector is largely a successful and well?functioning part of the system”.
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“The minimal Government measures announced in response… for SMSFs are further confirmation that the sector is performing well,” Self-Managed Super Fund Professionals’ Association of Australia chairman Sharyn Long said this morning.
Long said the official clarification around the use of in-house and personal assets was also welcomed. The review recommended that personal assets be phased out over a period of five years, but the Government says no changes will be made to either in-house or personal assets.
Those assets will be allowed, but Long says the industry will still be involved in developing a list of guidelines of using those assets, and how they should be authenticated, valued, etc.
“They have drafted a set of best practice guidelines as how those assets should be used and so on, and so we have guidelines for artwork but we need to move forward with other assets as well. The minister has also clarified that those guidelines will apply for new assets from July 1, 2011 and for existing assets from July 1, 2016.”
However, the industry has expressed only hesitant approval of one recommendation to have all SMSF auditors lodged within a register regulated by ASIC. This was included in the Cooper review, but some said the proposal was overkill given 95% of auditors are covered by the three existing accounting bodies.
Long says the industry supports the recommendation, and that it will work with the Government to consider guidelines and so on. “We were disappointed with the lack of a recommendation for the ATO to issue binding rulings… but that’s the only thing that we’ve lost”.
Liz Westover, head of superannuation at the Institute of Chartered Accountants, says there are benefits to the proposal but it will need to be spelled out in clear detail.
“I think there are benefits there. But what we need to continue to do is make sure that independent standards apply across the board. Because 95% of auditors are part of the three accounting bodies, and are obliged to adhere to competency standards.”
“They should apply to 100% of the audit population, so we really do welcome that proposal, but we will need to speak more about how that is introduced.”
The recommendation will also mean that the Australian Taxation Office will police the new standards and share information gained with ASIC.
Further recommendations adopted by the Government include the development an SMSF specialist knowledge component of advice standard, while the Government will also consider a special license for accountants who provide non-investment advice on superannuation.