Tougher rules urged for SMSFs

Global financial services group Mercer has told the Cooper Review that the rules around the operation of self-managed superannuation funds (SMSFs) need to be strengthened, including ensuring they are appropriate for particular consumers.

In its latest submission to the review into superannuation, Mercer said that while SMSFs were an appropriate option for some retirees, they were often not the best option.

“We consider that greater protection needs to be provided to SMSF members and potential members by strengthening the regulatory regime,” the submission said. “In particular, we consider that greater emphasis needs to be placed on checking the appropriateness of the SMSF structure for those considering the establishment of a SMSF.”

The submission suggested that the tougher rules around SMSFs ought to include greater training requirements for trustees, an initial audit to sign off on the suitability of a SMSF and tightening the current exemption from Corporations Law requirements for accountants.

It said these requirements would, at the very least, ensure those who were considering a SMSF were aware that other options exist.

“Improved regulation would be achieved by more frequent regulator reviews (by the Australian Prudential Regulation Authority not the Australian Taxation Office), bringing forward the timing of audits for newly-established SMSFs and ensuring that auditors are independent from those who prepare the accounts or administer the fund,” the submission said.