Superannuation Update for 2008

Here is a summary of the notable superannuation announcements and developments since the change in government.
 

Review of SMSF Governance

In a media release in February, Senator Nick Sherry, Minister for Superannuation and Corporate Law announced a consultation with superannuation practitioners and organisations regarding industry practices in self-managed superannuation funds (SMSFs). The Minister is concerned that that some individuals may be bullied into establishing SMSFs without fully appreciating the responsibilities and costs involved.

The Government will monitor the SMSF sector to ensure that current and potential trustees are aware of the risks involved and are equipped with the skills to run a fund in a 'prudent fashion'.

In-house assets and SMSFs — Finalised Tax Ruling SMSFD 2008/1

The ATO has finalised its ruling on whether investments by SMSFs in related companies or unit trusts are to be treated as in-house assets — materially the ruling is to the same effect as the draft.

You can read:

  • our summary of the draft determination here — published in ClearLaw in October 2007 here.
  • the finalised determination here.

Tax File Number warning

In early January, the ATO advised that it would pass on members' TFNs to superannuation funds unless requested otherwise.

Members have until late February to contact the ATO to ask it not to pass on their TFN.

The Rudd approach to superannuation

In a keynote address to the ASIC Summer School on 19 February, Dr Ken Henry, Secretary to the Treasury, shed light on the Rudd Government's policy on superannuation. He did so on behalf of Senator Sherry.

Of particular note were the following objectives which are generally in line with the previous government's superannuation objectives:

  • to achieve higher retirement incomes through a goal-oriented approach for age pensions and superannuation;
  • to simplify the superannuation regime so that each fund member can understand at least:
    • the general features of the superannuation system; and
    • the particular features of their own fund.
  • to provide safe, high quality default mechanisms for individuals who fail to make an informed decision;
  • to ensure that individuals have confidence that:
    • contributions will be made on their behalf;
    • their future income is safe from theft and fraud; and
    • they can be reasonably certain of how much income will be available to them when they retire.
  • to provide sufficient choice to allow individuals input in selecting superannuation options that best suit their needs;
  • to provide a cost effective savings vehicle with minimal operating costs; and
  • to ensure that superannuation is taxed in a fair and equitable manner so that individuals are motivated to contribute regularly to retirement savings.

Although at a general level, this is pretty much "business as usual", the detail of future legislation may contain the usual devilry.

Changing details for superannuation entities — in writing, online and by phone

Individuals or agents acting on behalf of a superannuation entity and wishing to update details for that fund or trust for ABN purposes may now apply to do so as follows:

  • Online at the Australian Business Register, www.abr.gov.au or the Business or Tax Agent Portals. Considerations are:
    • at the Business or Tax Agent Portals, oonly postal, email, business addresses, contacts and financial institution details may be changed .
    • for a tax agent to make a change, the tax agent's tax agent number must be recorded on a client's record.
    • to change details online, superannuation funds must register for a free digital certificate available here.
  • By phoning the ATO during business hours. However:
    • not all details may be changed over the phone; and
    • the person wishing to change the details must be recorded by the ATO as an authorised contact for the fund.
  • By completing the form entitled 'Change of Details for Superannuation Entities (NAT 3036). The form and instructions can be downloaded from the ATO website here.

More information

For more information, please contact Maddocks on 03 9288 0555 or 02 8223 4100 and ask for a member of the Maddocks Superannuation Team.