The Federal Government’s decision to expand the number of members allowed in an SMSF from four to six and to include SMSFs in the Superstream digital rollover process has been welcomed by the SMSF Association.
SMSF Association CEO John Maroney says: “We have been lobbying for these changes for more than five years, arguing they will prove extremely beneficial to the SMSF sector by reducing red tape.
“Expanding the definition of an SMSF from a fund with a maximum of four to six members will provide greater flexibility in how SMSFs can be structured.
“This will especially benefit family groups who want to include parents and their children (and potentially their children’s spouses) in a single SMSF.
“Currently, family groups may need to have multiple SMSFs to accommodate more than four members, so this proposal will allow a single SMSF for the group, bringing the benefits of reduced costs and greater scale.”
In some states, trust law will have to be amended to allow SMSF trustees to take advantage of this decision to allow SMSFS to have up to six members. But SMSFs can bypass this limitation by having a corporate trustee (where each SMSF member is a director of the corporate trustee).
Maroney says including SMSF rollovers in Superstream is a significant improvement on the existing system.
“This change to the mechanics of the super system is important to SMSFs. Currently, SMSFs can experience lengthy delays in receiving rollovers from large superannuation funds, so this change will ensure rollovers are made in a timely manner, enhancing choice and efficiency in the superannuation system.
“This will minimise friction between various parts of the super system and also reduce the time it takes for SMSF members to access their retirement savings held in large funds.”
He concludes: “The Association awaits with interest for more positive announcements from the Government in next month‘s budget.”