POWERED BY MOMENTUM MEDIA
SMSF Association hits out at PC’s evidence
The SMSF Association has slammed the Productivity Commission’s (PC’s) findings on the cost effectiveness of self-managed super funds (SMSFs) as based on “fundamentally flawed” evidence and claimed it does not consider individuals’ broader motivations in setting up the structures.
The Association said that factors such as data problems, investment return calculation methodology and the retirement demographics of SMSFs compared with Australian Prudential Regulation Authority (APRA) regulated funds made the PC’s assertion that SMSFs under $1 million weren’t cost effective “unreasonable”.
“The commission acknowledges in the draft report that there are issues with comparing APRA-regulated funds and SMSFs, and our analysis of the data issues leads us to the conclusion that it should reassess its draft findings that SMSFs with balances under $1 million are not cost-effective and underperform,” SMSF Association acting chief executive, Jordan George, said.
George also said the PC should consider factors such as transparency, engagement, tax planning and flexibility when looking at the cost-effectiveness debate, as the varied motivations of SMSF members go beyond just net returns and costs.
The Association strongly opposed an establishment limit, saying that it “paternalistically implied that only the wealthy know how to and are able to invest responsibly”.
Recommended for you
The impact of identity theft and its threat to superannuation savings were highlighted in a case that went before the Federal Court at the end of 2023.
A recent NSW Supreme Court decision is an important reminder that while super funds may be subject to restrictive superannuation and tax laws, in essence they are still a trust and subject to equitable and common law claims, says a legal expert.
New research from the University of Adelaide has found SMSFs outperformed APRA funds by more than 4 per cent in 2021–22.
The SMSF Association has made a number of policy recommendations for the superannuation sector in its pre-budget submission to the government.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
93.34 3 y p.a(%)
2
Global X GlobalX FANG+ ETF
37.15 3 y p.a(%)
3
GAM LSA Private Shares AU I
33.96 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
29.68 3 y p.a(%)
5
Plato Global Alpha A
28.73 3 y p.a(%)
