Industry concern over SMSF changes

By Rebecca Evans

Assistant Treasurer Helen Coonan has committed to examining the transitional issues surrounding soon-to-launch market-linked pension products, quelling superannuation industry concern about the treatment of complying pensions within self-managed superannuation funds (SMSF) in the lead up to the September 20 introduction date.

“I have committed to examining an interim solution for people who may not be able to obtain a complying pension and can’t access the higher reasonable benefit limit (RBL) in the fund, pending the new market linked product coming on stream,” Coonan says.

Industry representatives met with Senator Coonan last week to discuss recent moves by the Federal Government to improve the integrity of the superannuation system.

Taxpayers Australia head Carolyn Murphy says the meeting was constructive, but was “disappointed” the Government could not make any promises to lift restrictions on SMSFs announced in the Federal Budget.

Online Super chief Barbara Smith says SMSFs are “in limbo” until the new pension product is introduced in September.

“The Treasurer’s move disallows SMSFs with less than 50 members from offering defined benefit life pensions. This discriminates against SMSFs and would effectively force trustees to go to the big funds if they wanted to purchase this type of product,” Smith says.

“To do this undermines two key objectives of self-managed super funds — to avoid losing capital on death, and paying excessive fees to life funds,” she adds.

Senator Coonan says she is now considering all submissions from the superannuation industry.