Six-member SMSFs one step closer

It’s been a long time coming, yet it may finally be here. The arbitrary cap on the allowable number of SMSF members, limiting funds to just four people, appears set to be lifted.

The legislation has been delayed due to the pandemic but the proposal to increase the maximum number of members from four to six received some positive news when the Senate Economics Legislation Committee recommended it be passed. The Committee tabled its recommendation this week after the Bill was referred to the Committee for inquiry on 3 September 2020.

This comes at an important time for the industry, with interest in investment from first-time investors, particularly “millennials,” growing heavily in 2020. There has never been a better time to encourage engagement with what is one of the most valuable assets Australians will own when they retire; their superannuation.

Commenting on the Committee’s recommendation, SMSF Association CEO, John Maroney, says: “Given the committee comprised members of the major and minor parties, it was the strongest indication yet that this measure should be passed by the Parliament.

“In our submission, which was referenced by the inquiry, we said increasing the maximum number of SMSF members from four to six would provide additional flexibility and choice in the superannuation system for those in a position to use it.

“We also said this measure may lead to lower superannuation fees and could improve the ability to pool balances and invest in a greater choice of assets. So, we are pleased the committee has recommended that this bill be passed.”

Mr Maroney also noted concerns raised by the Labor Senators on the committee and their recommendation that the government should act on the Productivity Commission’s recommendation and require providers of SMSF advice to have completed specialist SMSF training.

“We acknowledge the concerns raised by the Labor Senators in their dissenting report.

“It has been the SMSF Association’s long-held policy position that SMSF advice should be underpinned by specialist education requirements, and it has been pleasing to see the number of advisers completing the SMSF Association’s SMSF Specialist Adviser Accreditation program increasing in recent times,” Maroney says.

Although the Parliament is set to resume this week, and there are still 12 sitting days left before the end of this calendar year, it is not yet clear whether the bill will be passed by then.

Let’s hope it is sooner rather than later.

Drew Meredith

Drew is editor of The Inside Network's publications and a principal adviser at Wattle Partners.