There is speculation that the Government may put in place mandated minimum balance levels for self-managed superannuation funds (SMSFs), according to the Shadow Minister for Financial Services and Superannuation, Chris Pearce.
Speaking at the Self-Managed Superannuation Fund Professionals’ Association of Australia (SPAA) national conference in Adelaide, Pearce said he was aware of a rumour that the Rudd Government may put in place barriers to entry for SMSFs in the form of mandated minimum balances.
The mandated minimum balance is rumoured to be in the range of $150-250,000, Pearce said.
The minister told delegates that the Coalition would “oppose any increase in barriers to entry” for SMSFs, saying that the self-managed super sector should represent just that: self management.
Pearce said he does not believe the SMSF sector requires wholesale reform, and that “regulatory overkill could significantly hamper” this part of the industry.
Furthermore, Pearce said mandated minimum balances would exclude individuals who wish to grow their superannuation balances gradually.
One of the primary issues regarding funds with small balances is the increased incidence of those trying to gain illegal early access to superannuation benefits. But Pearce said it would be unfair to “punish all users of self-managed funds for the behaviour of those trying to get early access”.
He referred to figures from the Australian Taxation Office that he said demonstrated the number of small accounts (of less than $100,000) was shrinking, and in 2007 represented less than 15 per cent of the market. Pearce said the figures suggested that the problem of “costly small accounts” was abating and, therefore, there was no justification for mandated minimum balances.
