Changes to superannuation and SMSFs in 2016?

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Superannuation changes in 2016What does 2016 have in store for SMSFs and the superannuation system, with the Financial System Inquiry recommendations, super fund governance, super choice, a Budget and a Federal Election?

Superannuation is likely to figure prominently in the upcoming Federal Election. The Coalition promised to take tax reform to this election, informed by the Tax White Paper. However it is possible this has lost it’s prominence, especially if there was an early election. We should also expect more policy announcements from the Labor party.

There also remains superannuation legislation before the Parliament, in particular changes to the governance arrangements of large superannuation funds – requiring at least one-third independent directors and an independent chair. This legislation was scheduled to go before the Senate in 2015, but was pulled in the face of opposition.

The Financial System Inquiry (FSI) recommended at least a majority of independent directors for large super funds, but the Government has gone with the previous Cooper Review recommendation of one-third. However some other recommendations of the FSI are likely to be implemented in 2016, including a legislated purpose for the superannuation system. The Government also said it would “consult on legislation to facilitate trustees of superannuation funds providing pre-selected comprehensive income products for retirement” in 2016.

The Government also looks set to change the super choice rules so that more employees can choose which super fund receives their employer contributions. Some employees currently do not have a choice of super funds, with their fund instead set by workplace arrangements. Expanding super choice was a recommendation of both the FSI and the Trade Union Royal Commission.

Of course there is also the Federal Budget in May, and any number of other opportunities for further changes to the superannuation system.

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