Advisers and self-managed super fund trustees could be forgiven for expecting the super changes that became law in 2016 to be the end of policy change for a while. But as my presentation this afternoon to the SMSF Association National Conference will detail, there is no shortage of policy issues in the pipeline, both in the short and long term.
The industry is awaiting the Productivity Commission report that is reviewing the competitiveness and efficiency of our superannuation system. This report represents the third and final stage of the commission’s current work on superannuation. It will, no doubt, contain many recommendations the government will have to give thoughtful consideration.
There’s also the matter of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, which will undoubtedly grab the odd newspaper headline during the year.
The government explicitly excluded SMSFs from the inquiry – a sign of confidence in our superannuation sector – but as delegates would appreciate, royal commissions have a habit of delving down burrows where they were not expected to go. For those with long memories, the Costigan Royal Commission into the Federated Ship Painters and Dockers Union, which ran from 1980-84, is a classic case in point, starting with organised crime and ending with tax evasion.
From the association’s perspective, the inclusion of advice and conduct issues around Australian Financial Services licensees could involve our sector. The commission has the power to extend its terms of reference, and our Australian Prudential Regulation Authority counterparts could use the opportunity to highlight what they see as flaws in the SMSF sector. Certainly, we will be keeping a close eye on proceedings.
The Financial Adviser Standards and Ethics Authority will have important consequences for the association’s members, relating to issues including the transition arrangements for existing advisers, the education curriculum, and code monitoring. Tomorrow morning, FASEA chief executive Deen Sanders will discuss the authority’s work program to raise standards, and the proposed guidance on qualification pathways for existing advisers. I encourage all delegates to attend.
Longer term, the association’s 2018 budget submission struck a chord with our call for appropriate integration between the superannuation and social security elements of the retirement income system.
In essence, we want the government to shift age pension means testing to a single comprehensive means test to ensure assets are fairly accounted for, to remove distortions based on how savings are held, and to ensure that there are appropriate incentives to save and drawdown on savings in retirement. Like building Rome, it won’t happen in a day, but the association is committed to continuing to push for what we believe is a valuable reform of the system.
Other long-term issues include: tackling the complex legislation that now underpins our industry (anyone doubting the veracity of this point should have been at last year’s Technical Day conferences); asset allocation, with a focus on capital security and income in the transition-to-retirement and pension phases of superannuation; and an ageing SMSF population and all its attendant issues.
Our industry will continue changing – $2.3 trillion in assets guarantees this. Indeed, the topic of this morning’s thought-leadership breakfast is an explicit recognition of this reality. What your association commits to is being abreast of any changes and working hard to ensure they are in the best interests of clients and their advisers.
Jordan George is head of policy at the SMSF Association.
