The Australian Law Reform Commission’s (ALRC) recommendations in its final report on elder abuse are positive steps towards helping mitigate the risks that could face ageing self-managed super fund (SMSF) members, says SMSF Association Chief Executive Officer John Maroney.
The report, titled “Elder Abuse – A National Legal Response”, has been welcomed by the Association as a “measured approach” to an issue that the ALRC acknowledges is only a minor issue now but has the potential to grow with 55% of SMSF members aged between 55-75.
“In our opinion the ALRC has found the right balance with its suggested reforms between mitigating this emerging risk without placing overly draconian restrictions on how the SMSF sector is regulated.
“In adopting this sensible approach, the ALRC has picked up on the key recommendations in the Association’s submission to the Commission, as well as in our detailed discussions with it on this critical issue.
“In essence, it involves changes to the superannuation laws to ensure that trustees consider planning for the loss of capacity of an SMSF member and estate planning as part of a fund’s investment strategy, and for the ATO to be told when an individual becomes a trustee of an SMSF because of an enduring power of attorney (EPOA).
“The investment strategy recommendation will ensure that SMSF trustees and their specialist advisors can give greater thought to planning for loss of capacity and ensuring that the right people are assisting SMSF trustees with their fund as they age.”
Maroney says the Association also supports the reform to provide replaceable rules in the limited circumstances where an SMSF trust deed does not appropriately allow a new trustee to be added to a fund where an EPOA is required to be used.
“Similarly, we support the ALRC’s call for a review of the laws regarding binding death benefit nominations for superannuation fund members, acknowledging that this is an area of law that is seeing more disputes among a deceased’s beneficiaries and relatives.”
The ALRC’s recommendations to increase oversight of the use of EPOAs and create a national plan and study of elder abuse are also supported by the Association.
“This report is an important step forward in combating elder abuse and we look forward to working with the Government in implementing the ALRC’s recommendations,” he says.