MLC backs use of SCT for SMSFs

The Government should consider extending the powers of the Superannuation Complaints Tribunal (SCT) to allow it to handle disputes relating to self-managed superannuation funds (SMSFs), according to MLC.

In its submission to the third phase of the Cooper Review, MLC has not only canvassed the use of the SCT with respect to SMSFs, but has also backed the continuation of planner remuneration for the sale of insurance products.

Regarding SMSFs, MLC said it believed it was appropriate that SMSF members had an affordable and accessible mechanism to manage disputes between trustee members and beneficiaries arising from the payment of death benefits.

It said there had already been cases where the timing and control of an SMSF had allowed benefits to be paid by the remaining or replacement member trustee in a manner that seemed to run counter to the deceased’s intent.

“The SCT would seem to be the most appropriate forum given its experience in this regard for Australian Prudential Regulation Authority-regulated funds,” the MLC submission said. “However, care would need to be exercised in setting the parameters for complaints to avoid the SCT becoming embroiled in family disputes, which may be more appropriately dealt with via the courts.”

Dealing with planner remuneration, the submission said MLC believed that advisers were entitled to be remunerated for the sale of fund insurance in situations where a financial adviser sets up a default fund for an employer and/or carries out ongoing member education and advice.

“Disclosure of any fees and commissions should be clear and transparent and at the ultimate discretion of the member,” the submission said.