The proposed amendments aim to streamline and clarify regulatory requirements for establishing SMSFs. The proposed changes to Section 254 of the Superannuation Industry (Supervision) Act aim to provide clarity on the information trustees must submit to the ATO when establishing an SMSF.
Currently, completing the “Election for a new superannuation fund to become regulated” process prescribes what information needs to be provided to the regulator. The existing process, though sometimes lengthy, is a well-established pathway through the ABR and simultaneously allows an SMSF to register for a TFN, an ABN and (if required) register for GST.
These new amendments have the potential to impact this process and raise concerns that, while streamlining certain aspects, might inadvertently complicate or prolong the SMSF establishment process.
The changes also propose a shift in focus from APRA to the commissioner of taxation, potentially opening the door to more direct oversight by the ATO. Is this perhaps indicative of a gradual move towards a more prudential regulation model, traditionally not within the ATO’s remit?
What’s equally concerning is that the changes will allow for more rapid regulatory changes. By delegating certain powers to the SIS Regulations, the government will have the ability to adapt to changing industry practices more swiftly. Perhaps this is a step towards giving the ATO more power to mandate trustee education before establishing an SMSF and towards giving the ATO more power to monitor new SMSFs in an effort to curb illegal access to superannuation benefits?
The crux of these changes lies in maintaining a delicate balance. On one hand, there’s a need to safeguard the integrity of SMSFs, ensuring a compliant framework is in place that can adapt to evolving industry practices.
On the other, it’s crucial to avoid over-regulation, increased red tape and administrative complexity that disadvantages those who genuinely choose to establish an SMSF for retirement purposes.
The exposure draft bill and regulations are open for consultation until 12 February 2024.
Please forward your feedback and comments to submissions@smsfassocation.com
As these developments unfold, stay informed and proactive and register to come along to National Conference 2024 where Peter Burgess prepares to ask the regulator directly about these changes and their concerns on the illegal early release of superannuation benefits.
