BGL chief executive Ron Lesh said he is concerned about the “continuing attacks on SMSFs” based on outdated and incorrect data used by the Productivity Commission.
“We have extracted data from our client database this week that tells us the data used by the Productivity Commission is simply flawed,” said Mr Lesh.
“Our data clearly shows the administration cost for funds with balances of less than $200,000 is around 1 per cent, and as the fund balance grows this percentage drops significantly.”
Mr Lesh said he has always been strongly opposed to establishing a minimum cap on how much is needed to set up an SMSF.
“It is simply not possible. The circumstances of people are all very different,” he said.
“You may have a guy who is 40 years of age, has a balance of $80,000 in an industry fund who decides to move to SMSF. Some people would say – hey that’s not enough to set up an SMSF. But the same guy is then going to make a non-concessional contribution of $100,000 the next year, make his $25,000 concessional contribution and buy a property with an LRBA. Does he now have enough in his SMSF?”
Alternatively, Mr Lesh said an individual may not have $100,000 to put in his SMSF, so he invests the $80,000 plus his $25,000 concessional contributions in Australian and overseas listed securities.
“What’s wrong with that? This likelihood he is would still be better than being in an industry fund – and he would know exactly where his money is invested and exactly to whom he is paying fees”, added Lesh.
Great call re bureaucrats, maybe a course on ethics and ant fraud behavior at the same time too.
Very good points Ron. Balances often start below $200k but quickly ramp up.
Thank heavens someone is finally standing up for the sector. Where’s the Association? Now they want a minimum of $1M in an SMSF! Trumpian in its absurdity.
Whole heartedly agree with Ron. Every fund situation is different. What about a small fund that has very large carried forward tax losses that are being used to offset tax on contributions. Should these be lost as well?
Worthy of a challenge in the Courts for Anti-Competitive behaviour. Or at least denying a person an entitlement to make the choice for themselves. I thought the government were PRO-Choice? Obviously “only for some”. Nanny-State springs to mind.
People want control and choice and they get that through a SMSF regardless of the amount. Well done Ron.
The productivity commission do not understand superannuation, let alone SMSFs.
I read a fantastic comment lately about the FASEA rules: There should be MUCH higher CPD requirements for bureaucrats – they should have to maintain significantly higher levels of knowledge (and experience!) relevant to the areas they are working in.