The Assistant Treasurer has released the Government’s response to the Cooper Review Report.
The Government will introduce a simple, low cost default superannuation product called MySuper to improve the simplicity, transparency and comparability of default superannuation products.
From 1 July 2011, the Government will commence the implementation of SuperStream, a package of measures designed to enhance administration of superannuation.
Self managed superannuation funds
The Government proposes increased oversight of SMSF service providers.
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. Identification measures will not apply retrospectively except for existing SMSFs wishing to organise rollovers from an APRA‐regulated fund.
New penalties will be introduced to prevent illegal early release.
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.
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.
The Government 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 does not support some of the Review’s recommendations in relation to the SMSF sector. The ATO will not be provided with the power to issue binding rulings in relation to SMSFs. Data on SMSF borrowing will not be collected from credit providers, but will be collected directly from SMSFs as part of the ATO’s collection and publication of SMSF data. Investment in in‐house assets will not be prohibited and SMSF trustees will not be required to provide information to members on an annual basis.
The Government will increase the obligations of superannuation fund trustees to manage their fund’s superannuation assets prudently and in the best interests of all the members of the fund.
Timing and implementation of reforms
The use of tax file numbers as primary account identifiers will start on 1 July 2011. Most measures in the broader SuperStream package will be in place by 1 July 2015.
The tightening of restrictions on self managed superannuation fund investment in collectables and personal use assets will start on 1 July 2011. Most other measures relating to self managed superannuation funds will commence from 1 July 2012.
Superannuation funds will be able to offer a MySuper product from 1 July 2013.
The timing of the commencement of measures relating to governance, integrity and other regulatory settings will be determined following consultation.
Coordination with other reviews
A number of reforms relating to financial advice, commissions and disclosure issues will be subject to consultation through the Government’s Future of Financial Advice processes.