SMSF Association CEO John Maroney previously raised concerns about the draft legislation’s requirement for APRA-regulated fund trustees to develop a strategy for members who are retired or approaching retirement, saying it could lead to additional costs and more red tape.
“Just because the law doesn’t require you to have a retirement income strategy, doesn’t mean you shouldn’t have one,” Mr Maroney said.
“It’s not a green light for SMSF trustees to ignore the spirit of a retirement income covenant, as we know from bitter experience that failure to properly address these issues can derail even the best-laid retirement income plans.”
Mr Maroney added that it is still important for SMSF trustees to ensure their members are covered by a strategy. However, imposing it by law would result in more compliance burdens for trustees and auditors.
He said that the matters and risks in the draft legislation about maximising retirement income for members should instead be used as an “action plan or blueprint”.
“It also highlights the importance of specialist SMSF advice to assist SMSF trustees identify and mitigate these risks as well as addressing specific SMSF issues such as planning for loss of capacity, ensuring there are valid enduring powers of attorney in place, and assessing the ongoing suitability and viability of an SMSF,” Mr Maroney said.
On Monday, the Australian Taxation Office (ATO) announced an extension of the relief measures introduced to ease pressure on SMSF trustees due to the ongoing effects of the COVID-19 pandemic.
SMSF residency, rental, loan repayment and in-house asset relief offered by the ATO for the 2019–20 and 2020–21 financial years will now be available for the current financial year.
Legislation shouldn’t apply to a sector of the market says association that has a vested interest in said sector.