Overall, 2014 was a good year for self managed super funds (SMSFs). Aside from the introduction of new trustees penalties, which after a false start in 2013 finally came into effect in July, there were very few rule changes that directly impacted SMSF trustees.

In fact, 2014 saw the continuation of a period of relative stability for SMSF trustees with regard to rule changes. Arguably, aside from the new trustee penalties, we need to go back to September 2007, when the new borrowing rules were introduced, to find the last time there was a significant change to the rules that directly impact SMSF trustees.

This period of relative stability is hardly surprising given the Cooper Review findings back in 2010, which indicated the SMSF sector was largely successful and functioning well.

Not that the introduction of the new trustee penalties was a bad thing either. I think we would all agree it is not appropriate that SMSF trustees can continue to contravene the law and expect their actions to have no consequences because the available enforcement remedies are not proportional to the conduct.

The power to give directions and impose administrative penalties for breaches of the rules provides the ATO with additional tools, both educational and punitive. These tools provide a flexible and cost-effective mechanism for imposing sanctions that reflect the nature and seriousness of the breach and will support the ongoing integrity of the SMSF sector.

For me, the introduction of the new penalties was actually a highlight of the year. It’s not often an industry embraces the introduction of a new penalty regime in the same way the SMSF sector has. It demonstrates the maturity and professionalism of the industry and its desire to work together to uphold the integrity of the sector.

What lies ahead

So what lies ahead in 2015 for the SMSF sector? With the release of the Tax White Paper in 2015, we can expect to see continued debate and discussion about the value of the superannuation tax concessions and how these concessions should be targeted. SMSFs, with their high proportion of individuals with large superannuation pension balances, can expect to be pulled into this discussion.

No doubt we will continue to see debate and discussion about the merits of borrowing and gearing inside SMSFs. Regardless of the eventual outcome, one thing looks certain – the SMSF sector will continue to grow. After all, it’s not as if the sector was struggling to grow before the borrowing rules were introduced in September 2007.

While there are some potential changes over the next 12 months, the SMSF industry remains in a strong position, with significant capability for further growth. Advisers and providers of administration services to SMSF trustees will continue to play an important role in communicating changes and helping to design effective investment strategies. It will certainly be another interesting and no doubt successful year ahead for the SMSF sector.