In media release No 2010/024, issued 16 December 2010, the Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten, announced the release of the Government's response to the recommendations of the Super System (Cooper) Review, entitled "Stronger Super".
"Stronger Super represents the Government's reform agenda for the superannuation industry. By setting out a clear path for future reform, the Government is providing certainty to both the industry and fund members," Mr Shorten said.
The Stronger Super package includes the introduction of a new low cost and simple default superannuation product called "MySuper", heightened duties for superannuation trustees, and support for the Super System Review's SuperStream proposals.
The Government will undertake further consultation with stakeholders on the implementation of its reforms. The consulation will be completed before MySuper products are able to be offered from 1 July 2013.
In relation to Self Managed Superannuation Funds (SMSFs):
- The SMSF registration and rollover processes will be amended to reduce the incidence of funds being illegally released from SMSFs.
- Proof of identity checks will be required for all people joining an SMSF, whether they are establishing a new fund or joining an existing fund.
- New penalties will be introduced to prevent illegal early release. Criminal and civil sanctions will be introduced for illegal early release scheme promoters and amounts illegally released early will be taxed at the superannuation non-complying tax rate, with an additional penalty that takes into account the individual circumstances. Also, the superannuation legislation will be amended to enable the ATO to enforce the requirement for SMSF assets to be separated from personal or employer assets.
- The ATO will be provided with new regulatory powers to prevent and penalise breaches of the superannuation legislation. A sliding scale of administrative penalties will be introduced for less serious cases of non-compliance and will be payable by the trustee, not from the assets of the SMSF.
- The ATO will also be given the power to issue trustees with a direction to rectify contraventions within a specified timeframe and to enforce mandatory education for trustees where there is non-compliance with the superannuation legislation, particularly less serious non-compliance, so that these trustees are aware of their obligations.
- Knowledge and competency requirements will be developed for SMSF service providers. ASIC will develop a mandatory SMSF specialist knowledge component of Regulatory Guide 146 to impose minimum training requirements on financial advisers providing services to SMSFs.
- ASIC will also be appointed as the registration body for SMSF approved auditors. ASIC will determine the qualifications and minimum ongoing competency and knowledge standards required for eligibility to be registered, taking into account existing professional competencies and knowledge standards. The ATO will monitor compliance with the approved auditor standards.
- Approved auditors will also be required to meet independence standards as part of their ongoing registration. ASIC will examine existing auditor independence standards that may be applied and, if necessary, develop new independence standards.
The Government has previously announced that it will continue to allow SMSFs to invest in collectables and personal use assets, provided they are held in accordance with tightened legislative standards. These legislative standards will be developed in consultation with industry and will apply to new investments from 1 July 2011, with all holdings of collectables and personal use assets to comply by 1 July 2016.
The Government will establish an SMSF sub-group of the overarching consultative group in early 2011 to progress the implementation of the SMSF reforms. Initial consultation will focus on detailed design and implementation issues, with subsequent consultation on exposure draft legislation
To access the Stronger Super website, and obtain a copy of the Stronger Super package, go here