Superannuation and accounting bodies have welcomed the Federal Government’s response to the Cooper Review recommendations on the $409 billion self-managed superannuation sector.
The review includes no additional investment restrictions for SMSFs, higher standards for SMSF advisers and consideration of a restricted license arrangement for accountants who provide limited super advice.
Under the government’s reforms, all approved SMSF auditors will be required to meet competency and independence standards as part of an ongoing registration with the Australian Securities and Investments Commission.
Liz Westover, head of the Institute of Chartered Accountants in Australia, says the super system will benefit from a register of SMSF auditors, and welcomes the move to apply independence standards across the board.
According to the Institute, more than 95% of Australia’s 11,500 SMSF auditors are members of the three professional accounting bodies and are bound by minimum competency requirements and specific professional and ethical standards, including around independence, set by the Accounting Professional & Ethical Standards Board.
“The Institute has long been calling for the existing standards to apply to 100% of SMSF auditors, so we are very pleased the government has not only acknowledged the high benchmark we have set, but also recognises the need for its wholesale adoption,” Westover says.
Sharon Long, chairman of the Self-Managed Super Fund Professionals’ Association of Australia, says the government’s minimal changes to the reforms are further confirmation that the sector is performing well and doesn’t require significant intervention or overhaul.
“SPAA believes SMSF investments should be free from government intervention as far as possible… We particularly note the government’s comment that there is no evidence that current in-house asset investment rules have caused any ‘detriment’ to SMSFs,” she says.
The SPAA also supports the move to develop an SMSF specialist knowledge component of advice.
“We have argued in our Cooper submissions that the SPAA Specialist Auditor and SPAA Specialist Advisor accreditations be used as the basis for improved advice standards in the SMSF sector,” Long says.
SPAA has also been assisting the ATO on measures to reduce instances of fraud and illegal early access, and endorses the government’s move to require verification of identity and other checks.
“[However], we are disappointed the government response to Cooper has ruled out the use of Australian Tax Office binding rulings in relation to SMSFs as we believe such rulings can provide clarity and certainty for SMSF trustees,” Long says.