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Sensationalist headlines hurt retirement outcomes, warns ASFA

The Association of Superannuation Funds of Australia (ASFA) has refuted criticism of the Australian superannuation system, saying it is working by producing superior returns and reducing fees,

ASFA said that “misleading analysis led to sensationalist newspaper headlines that only served to alarm Australians and detrimentally impact retirement outcomes,” without naming the newspapers.

ASFA rejected that the Australian super system lagged behind the rest of the world, saying it had instead delivered “superior” returns. The organisation pointed to statistics that, over the five years to 2017, Australian super funds had the highest average investment returns in the OECD. Read more...

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Super gender gap at retirement is 43%, or $132,000

The superannuation gender gap just before retirement is currently 42.7%, or $132,000.

Roy Morgan Research finds that the average superannuation held by women planning to retire in the next twelve months is $177,000 – which is 57.3% of the balance of men at the same stage, who have $309,000 on average.

The super gender gap has shrunk slightly since 2008, when it was 44.76% ($78,000 to $143,000).

“Despite a great deal of publicity being given to this issue over the last decade in an attempt to close the gender gap in superannuation, there has been no real progress. This is evidenced by the fact that it has taken ten years for the female average superannuation for intending retirees to move from 55.2% of the male average to 57.3%,” said Roy Morgan Research. Read more...

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BGL hasn’t forgotten about Simple Fund Desktop users

BGL added over 80,000 SMSFs to Simple Fund 360 in the previous financial year, but hasn’t forgotten about customers still using Simple Fund Desktop.

According to BGL it added 82,697 SMSFs to Simple Fund 360 in 2017/18, taking the total on the cloud software to 159,767. It added more than 1,700 firms, with the total at the end of the financial year at 4,214.

Part of this dramatic increase is likely due to customers transitioning from Simple Fund Desktop to Simple Fund 360, however BGL Managing Director Ron Lesh said users of the desktop software haven’t been forgotten. Read more...

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ECPI calculations just got a lot harder, says Class

New ATO guidelines have “significantly” changed industry practice of how ECPI is calculated, said the company.

Whereas previously the industry approach was to use either the segregated or unsegregated method for a whole financial year, the ATO guidelines require a different approach for the 2017/18 and later years.

Class has released updates to Class Super which it says will streamline compliance with the new rules.

“For the financial year ended on 30 June 2018 onwards, a fund must use both the segregated method (for the period while it is in 100% pension phase), and the unsegregated method (for any periods where it is in a mix of both pension and accumulation phase). The ECPI percentage must only be applied to income and expenses falling within the unsegregated periods i.e. actuarial certificates now only cover the periods where there are unsegregated assets in the fund,” said Class. Read more...

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Alliance launches anti-Labor imputation credit policy website

The Alliance for a Fairer Retirement System, which includes the SMSF Association and National Seniors Australia, has launched a website as part of its campaign against Labor’s imputation credit policy.

Labor has a policy of stopping the refunding of imputation credits for most taxpayers, a policy which the Alliance says will be detrimental to retirees and small businesses – who can lodge their concerns about the policy on the website.

The Alliance says there is growing scrutiny about Labor’s policy, including a disputed Treasury analysis. Read more...

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ANZ & CBA accept Undertaking over distribution of super products in branches

The ANZ and CBA have reached an agreement with ASIC to change how they distribute some of their superannuation products.

ASIC announced that it has accepted enforceable undertakings from the two banks, following an investigation.

The regulator says it found the banks had a “common practice” of offering their superannuation products – Smart Choice Super for ANZ and Essential Super for the CBA – to customers at the conclusion of a fact-finding process. ANZ called its process an ‘A-Z review’ and CBA called theirs a ‘Financial Health Check’. Read more...

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Liam Shorte joins SMSF Association Board

The SMSF Association has announced that Liam Shorte will be joining its Board.

Liam Shorte, of Verante Financial Planning, is an SMSF Specialist Advisor and has chaired the SMSF Association’s NSW Local Community since 2015. He will join the Board on 1 September 2018, replacing Andrew Gale.

“It was a carefully considered choice to appoint Liam,” said SMSF Association chairperson Professor Deborah Ralston.

“His practical knowledge of the sector derived over many years from dealing directly with clients will be of enormous value to the Board, the Association, and the wider SMSF community.” Read more...

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Super funds tie record number of consecutive years of positive returns

Superannuation funds are “poised” to equal the record for consecutive years of positive investment returns, at nine years, says firm Chant West.

Early estimates put the returns for 2017/18, for the median growth fund, at an “impressive” 9.2%. This makes a nine year streak of positive returns, the other time this number of consecutive years of positive returns was achieved was between 1992/93 to 2000/01.

“Growth funds will post another strong return for the 2018 financial year and extend their streak of positive years to nine, with some funds delivering double digit results,” said Chant West senior investment research manager Mano Mohankumar. Read more...

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More details on three-yearly SMSF audits released

The Government’s has given more detail on its proposal for a three-year SMSF audit cycle, which was announced in the 2018 Budget.

“This change will reduce the compliance burden for funds that have a history of good behaviour and have relatively simple affairs,” said Minister for Revenue and Financial Services Kelly O’Dwyer, releasing a discussion paper for consultation.

“The objective is to incentivise good SMSF record-keeping and compliance by alleviating the regulatory burden whilst maintaining optimal system oversight and integrity,” said Minister O’Dwyer. Read more...

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Superannuation Bills largely stalled in Senate ahead of winter break

With Parliament having risen for the long winter break many of the Government’s superannuation Bills remain stalled in the Senate, with some not even being debated yet in 2018

ASIC fee-for-service Bills

The Bills to change ASIC towards a fee-for-service model have passed the Parliament. In part the Bills will lead to increases in the fees for SMSF Auditors, in some cases substantial fees. The actual level of the fees will be set in regulation, which Minister for Revenue and Financial Services Kelly O’Dwyer said would be made “shortly”. Read more...