My blog site is moving

As of 2 June 2011, all my new blogs will be posted in the Institute’s new myCommunity section.

To follow my blog at its new location, I invite you to login to this exciting new online resource for Institute members and finance professionals.

I look forward to hearing your views on future blog posts in myCommunity.

Regards, Liz Westover.

Continuing with collectables

In his 2010 recommendations to the federal government, Jeremy Cooper suggested banning self-managed super funds (SMSFs) from investing in collectables and personal use assets. Fortunately, the government didn’t take up this recommendation, but felt it wise to put some parameters around how SMSFs could continue with such investments.

Following consultation, the government has now released an exposure draft detailing what those parameters will be. From 1 July this year, it is proposed that assets that are categorised as collectables and personal use assets cannot be leased to related parties, cannot be stored in private residences of related parties and certain items cannot be used by related parties (though interestingly, wine wasn’t one of them!) Other measures include trustees documenting decisions, holding insurance in the name of the fund and valuations on transfers to related parties.

In the past, unforeseen outcomes have resulted following changes in legislation (such as the excess contributions tax) so I’m keen to know if anyone can anticipate any problems in the implementation of these draft regulations. One person advised that, in his case, the insurance is already undertaken, albeit by another party, and questioned the need for additional insurance in the fund’s name (in a gallery holding artwork for his SMSF which already had insurance over the asset). Are there any other examples you are aware of? Now is a good time to raise any concerns, before the regulations are finalised!

What are your thoughts? Feel free to comment below or email me at superannuation@charteredaccountants.com.au

Excess Contributions Tax - getting fairer

In the lead up to the Federal Budget announcement, a hot topic in the superannuation industry has been the ugly, unfair penalties that exist for those who breach the superannuation contributions caps.

Fortunately, the federal government took its first steps towards addressing this issue in its Budget announcement last night.

The government announced it will provide a one-off opportunity for people who make excess concessional contributions of less than $10,000, to have those contributions refunded. As a result, many of these people will no longer incur excess contributions tax, which could have been as high as 93%.

This is a positive step in making the superannuation system fairer and will assist Australians who are trying to save for their retirement within the current rules. For many people making minor, inadvertent breaches of their concessional caps, the proposed legislation will provide relief where they might otherwise have suffered significant tax penalties.

It is important to note, however, that the measures will not assist everybody – more significant breaches will not be eligible for correction and individuals will only be given one opportunity to correct one breach of the concessional cap. There are still a number of people who will continue to be unfairly impacted by this onerous tax.

The legislation will also only apply to excess contributions made from 1 July 2011.

It’s been a long time coming, but I am pleased that the government has taken this important step in making the superannuation system a little bit simpler and fairer for Australians saving for retirement – even if there is more work to do.

Accountants and financial advice: fitting round pegs into round holes

With the release by Minister Shorten this week of announcements dealing with the Future of Financial Advice (FoFA) reforms, it was encouraging to see that the federal government has acknowledged the important role that professional accountants play in the provision of financial advice to Australians.

In April 2010, the FoFA reforms discussed the removal of the “accountants’ exemption”, which had allowed accountants to advise on the opening and closing of self-managed super funds. There was concern that without an appropriate replacement, the role of accountants could be eroded, despite their status as trusted advisers.

Minister Shorten’s announcement, however, supports what we have always known – that it is in the best interest of our clients for accountants to be able to ‘consider a broader range of financial issues, particularly in relation to the establishment of self-managed superannuation funds’.

Consultation continues on exactly how professional accountants will fit into an overall regime that deals with the provision of all types of financial advisory services to Australians. As discussions continue, it will be important to ensure that square pegs are not shoved into round holes. We cannot simply try to fit accountants into a licensing regime in exactly the same way as financial planners – they offer different services, have different skill sets and different experience. Most accountants do not want to give financial product advice (and if they did, they would need to operate under a full Australian Financial Services License). They do, however, want to talk about a broader range of non-product issues. A new regulatory framework must be workable, sustainable and meet the needs of accountants and their clients.

As Minister Shorten recently said, ‘accountants are the trusted advisers of many Australian families’. In this capacity, clients ask their accountants questions on non-product issues that will not be asked elsewhere – the solution to the accessibility of financial advice for Australians must include an appropriate framework in which accountants can operate in order to answer those questions.

SMSF Auditors – striking the balance

The Commissioner of Taxation, Michael D’Ascenzo, recently described auditors as the ATO’s ‘eyes and ears’ for the self-managed super fund (SMSF) market, making an important contribution to the integrity of the system. I agree – SMSF auditors play a vital role in the success of this growing sector of the superannuation industry.

As the Stronger Super reforms are progressing, the measures for SMSF auditors around registration, competency and independence are being addressed. Because of their essential role, the government will want to maintain appropriate levels of competence for SMSF auditors.

The challenge for government and its advisers is to strike the right balance between determining the appropriate minimum requirements for auditors to operate, and ensuring that we still retain and attract adequate numbers of auditors to the industry.

The SMSF working group that is reporting to government on the Stronger Super reforms in the SMSF sector is currently discussing this very challenge, debating how much education and experience is necessary to qualify as an SMSF auditor.

While the bar cannot be set so low that underqualified and inexperienced auditors are able to operate in the industry, it is not in our best interests for the bar to be set so high that no one is willing to go through the qualification process. This could result in an insufficient number of auditors to audit the 440,000 SMSFs that now exist.

So what is the right balance? Consider these:

• What is the appropriate level of education; degree, diploma, specific SMSF audit course (or all of the above)?


• How many hours of SMSF audit experience should a person have before they can register as an SMSF auditor (suggestions have ranged from 100 hours to 1,000 hours)?


• How many audits should a person be undertaking per year for them to be considered ‘experienced’ enough to register as an SMSF auditor?

What do you think? How much education and experience do you think an SMSF auditor should have?

Complicating concessional caps

I recently started writing the Institute’s submission to Treasury on the implementation measures to make permanent the higher concessional contributions caps of $50,000 per annum for those over the age of 50. The catch now is that the increase will only be available where the person has a superannuation balance of less than $500,000.

I found, however, that before I could even get into the detail of the submission, the broader issues of the impact of this legislation were becoming more apparent and it worries me.

Firstly, it concerns me that the $500,000 balance limit (which will not be indexed) could send a message to Australians that once you meet this level of superannuation savings, you have enough to live on when you retire. We are an ageing population; individuals will be spending more years in retirement than ever before. It is a dangerous message for Australians to be receiving that this will be enough.

Secondly, including a maximum superannuation balance adds yet another hurdle for people to jump over in saving for retirement. It worries me that the new rules are going to exacerbate an already growing problem of people being subjected to excess contributions tax. The consequences of the concessional contributions caps legislation are already causing major problems for people – adding another factor (the $500,000 balance limit) will cause more people to falter and I believe that many more will be receiving excess contributions tax assessments as a result.

At a time when we have undergone a major review of our superannuation system in order to simplify and restore confidence in it, we should be thinking very carefully before bringing in new rules that will add complexity, cost and confusion and undermine other efforts to restore the confidence of Australians in their super.

Excess Contributions Tax – getting uglier

The latest ATO figures show that more Australians are breaching their concessional super contributions caps than ever before and are being slugged with extreme excess contributions penalties as a result. In fact, 65,733 people breached the cap in 2009-10 - more than twice the number of people who breached the cap in the previous financial year. The situation is getting worse and many of these breaches are unintentional errors by Australians wanting to save for their retirement within the current rules. So why are they being so severely punished?

I wonder why the government is so reluctant to remove this ugly tax, particularly when many alternatives have been suggested to fix the problem of people putting ‘too much’ money into super. The longer the government waits to solve the problem, the more it looks as though the tax is a revenue raiser!

If the government is going to impose limits on the amount people can contribute to their super, then they also need to be realistic about imposing appropriate penalties for making a mistake. In order to prevent too much money going into a concessionally taxed environment, excess contributions should simply be refunded.

This is a flawed tax and is detrimental to the retirement savings of many people who are genuinely trying to do the right thing. It’s time for the government to commit to change.

Reporting super – are employers getting it right?

I was working on a submission to Treasury this week on amendments to the legislation for Reportable Employer Superannuation Contributions (RESC). While the changes aren’t particularly controversial, the submission raised a bigger issue – are employers getting their reporting obligations right?

RESC are super contributions employers make for employees where the contributions are in excess of the superannuation guarantee of 9%. They must be reported on an employee’s annual payment summary.

Why is RESC required to be reported?

The law exists so that an employee’s entitlement to government assistance programs can be determined. There was a concern that people could salary sacrifice their earnings into superannuation and become eligible for various government handouts as a result of their reduced salary and wages component.

Some Chartered Accountants have expressed concern that employers may not fully understand their obligations about what to report, or the implications of getting it wrong. Some, they say, are reporting the compulsory 9% superannuation guarantee amounts (which they are not meant to do) and others are not reporting any amounts at all!

The result is that some people are being overpaid on their government entitlements, and others are missing out!

I would be very keen to hear of other people’s observations – as an accountant, as an employer or as an employee. Would you know how to determine if the right amount was on your payment summary?

Is the answer as simple as more education for employers or is it all just too complicated?

The realities of life when saving for retirement

The Institute lodged its 2011-12 Federal Budget submission to Treasury this week. It included a number of important recommendations for superannuation.

Two of our headline recommendations in super were changes to:

1. Concessional contributions cap rules
2. Excess contributions tax.

The level of concessional contributions caps at $25,000 (for those aged under 50) and $50,000 (for those aged over 50), is simply too low. More than that, however, the current system does not adequately address an individual’s changing capacity for saving for retirement. The caps were introduced to encourage Australians to save consistently over their working life, but let’s face it; very few people have the capacity to save at each stage of life. At various times in life, we have costs like mortgages, children to feed and clothe, or school fees to pay.

It would be preferable if a person could, for example, pay less super at a stage in life when their expenses are high and more super when their expenses are lower.

The system needs to better accommodate the realities of life as a home owner, a parent or someone whose life choices necessitate lower incomes. A better option would be a carry forward provision for those caps to enable people to ’catch up’ later when they are more able to do so.

The excess contributions tax continues to cause angst for many people and the government seems reluctant to act on it. A tax this onerous, imposed as a penalty for those trying to save for their retirement within the existing rules, contradicts the government’s claims to be encouraging greater superannuation savings!

The government could implement fairer ways to ensure people only contribute within the contribution caps, such as refunding the contributions back out of the system, including any earnings on the excess contribution amounts.

This tax should not exist in its current format. Measures are needed to ensure people stay within their caps, but a system in which a person who, making an inadvertent error, contributes over their cap can be subjected to a whopping 93% tax is simply wrong.

SMSFs and the practicalities of real estate investment

Here we go again – ready for another big year in superannuation. Already, unfortunate events this year have highlighted some areas of concern. Not least of all, the flood crisis around Australia that has caused untold damage and heartbreak.

While the full extent of destruction to property and infrastructure is still being determined, flood affected communities are rallying together to rebuild and repair the damage. But as property owners assess their repair needs, the trustees of self-managed super funds (SMSFs) that have invested in ‘real property’ through limited recourse borrowing arrangements, have run into some issues.

Currently, the rules around these arrangements limit the ability of owners to fund repairs to their property; many SMSF investors with flood-damaged property are likely to be affected.

The SMSF industry, including the Institute, has for some time been highlighting the practicalities for real estate investment to the Australian Tax Office (ATO) as they work through the limited recourse borrowing arrangements legislation. We have been arguing that without the capacity to repair a property, SMSFs are unable to appropriately deal with the realities of property ownership. It has now taken the unfortunate, large-scale damage caused by the floods to provide a significant and practical illustration of this legislation’s shortcomings.

If the limited recourse borrowing arrangements are not meant to apply to real property investment, then this type of investment should simply be disallowed from the arrangements. If, however, common sense prevails, the legislation needs to be changed or given a meaningful interpretation to truly accommodate the realities of property investment and ownership which, by their very nature, will include repairs.

Do you know of anyone who has been recently caught out by this legislation? Feel free to comment below or send me an email. We need to make it very clear to government and the ATO that there is still much work to be done!

The future for SMSF auditors

The die is now cast – following the government’s response to the Cooper Review, ASIC will be appointed as the registration body for self-managed super fund (SMSF) auditors. Having a registration body for SMSF auditors is good for the industry and consumers, although I believe the ATO is better placed to undertake this function by building on and improving the existing reporting framework. Despite who the registrar is, a formal registration will enhance the integrity of the audit function and, regardless of registration requirements for individuals, will encourage auditors to evaluate their own suitability to undertake SMSF audits, (i.e. ‘Is it worth registering when I only undertake a few audits per year?’)

A lot of SMSF service providers will be wondering if they will have to change the way they do business, so the million dollar question is: ‘How did the government respond to Jeremy Cooper’s view on mandatory outsourcing of all SMSF audit services to address auditor independence issues?’

The answer is that the government didn’t specifically address mandatory outsourcing. What it did say was that approved auditors would need to meet independence standards as part of their ongoing registration and directed ASIC to examine existing auditor independence standards that may be applied.

As I have been saying for a long time (and to everyone that will listen), mandatory outsourcing of audits will NOT ensure independence. In fact, it may even facilitate attempts to circumvent independence! Robust professional and ethical standards, which cover independence issues, already apply to 95% of SMSF auditors - those who are members of one of the three professional accounting bodies. ASIC now needs to make sure those standards apply to 100% of SMSF auditors.

The journey into super reform is just beginning...

After nearly six months of anticipation, this morning, Assistant Treasurer Bill Shorten responded to the recommendations of the Super System (Cooper) Review.

While there were no surprises in the government’s response, the overall announcement on super reform is momentous in its implications, and this morning I had a chat to Carson Scott on Sky Business News on some of the highlights.

I mentioned that people are reluctant to commit to super because they are concerned the rules surrounding it won’t be the same when they retire. There have been so many changes to the super system in the last 20 years that many Australians either lack confidence in the system or are simply disengaged from it.

The reforms – designed to reduce fees, address lost super, provide a simple, cost-effective default fund product, and deliver access to meaningful and comparable information on super accounts – will be a great first step in ensuring Australians regain their confidence in super.

But despite the positive start to super reform, there are still some loose ends if you look at the bigger reform picture. Choosing to link the super guarantee (SG) increase with the package of reforms that includes Minerals Resource Rent Tax (MRRT) is one example. Because the process around implementation of the MRRT is far from certain, there is a risk of the whole thing falling through.

However, there are other ways of achieving the same objectives of an SG increase. You might remember that the Henry tax review report suggested leaving the SG rate at 9%, and instead adopting a number of other reforms which would have the same net effect on retirement savings as raising the SG rate to 12%.

One real win in today’s announcement, though, is the consultative approach the government is taking by involving industry experts in the technical detail of the changes.

While there is still a lot of work to be done, the government’s commitment to superannuation reform in the best interests of working Australians will go a long way to boosting and protecting retirement savings. The journey into superannuation reform will not be short, but it is a worthy initiative – I believe we are taking steps in the right direction.

If you’re interested, our media release has more information.

2011: A year for ‘decision and delivery’

I attended a Committee for Economic Development of Australia (CEDA) breakfast recently at which Prime Minister Julia Gillard was presenting.

Ms Gillard said 2011 would be a year of ‘decision and delivery’ for the government. Certainly, with the number of reviews and enquiries the government has launched over the last two years, ‘decision and delivery’ will be a welcome approach in the new year, if only to provide clarity around where certain industries are heading, and allowing industry participants to prepare accordingly.

Interestingly, Ms Gillard only noted two action items for superannuation in her speech: increasing super guarantee levels and addressing government contributions for low income earners. Given the super industry is eagerly anticipating the government’s response to the Cooper Review – due out before Christmas – I thought that was a rather minimalist inclusion by the Prime Minister.

With that in mind, I thought I would outline a few items on my own wish-list for ‘decision and delivery’ in superannuation for 2011:

1) Respond to the Cooper Review report decisively – strive to set the right policy settings by applying practical solutions to identified issues. Open and honest consultation will be imperative, and remember: more rules and greater regulation will not necessarily solve the problems.

2) Abolish the extreme penalties from the excess contributions tax – Australians should not be punished for trying to do the right thing and save adequately for their retirement.

3) Raise the concessional contributions caps to a more realistic level that will enable Australians to save more for their retirement.

4) Allow all Australians to top up super guarantee amounts by claiming a tax deduction for personal super contributions (not all employers let their employees salary sacrifice to top up super guarantee contributions). Then, address the anomalies in super guarantee payments that allow an employer to satisfy their obligations with an employee’s own salary sacrifice amounts.

5) Resolve to stop tinkering with super – fix it and then leave it alone! (See my last blog). This alone will do wonders for engagement with super in Australia.

The decisions the government is about to make in superannuation will be momentous for the industry and for Australians striving to save for a comfortable retirement. And they are decisions that will be felt for years to come. The government, charged with the critical task of making the right decisions, is about to create its legacy in policy-making, not just around super, but around tax and financial services too.

It’s a big task, but with open and honest consultation, effective decisions and delivery are within reach.

Planning for the retirement tsunami

I recently read an editorial in The Australian by Peter van Onselen entitled ‘Mexican standoff over super serves no one.’

It identified some of the more controversial issues in super at the moment, including the increase in the super guarantee rate to 12% from 9%, the low concessional contribution cap and the heavy tax penalties for exceeding the contributions caps.

Of interest were the author’s comments about superannuation in Australia in the context of the fiscal pressures that will be caused by our ageing population. As Mr van Onselen notes, if the government doesn’t fix super, ‘it is the equivalent of warning about an approaching tsunami without planning for its arrival.’ How right he is.

I would add to this that in formulating a plan for superannuation, we are only hurting ourselves when we make frequent changes to the system. Taking the tsunami analogy further, if people become confused about the latest plan of action when the tsunami hits – or they lose confidence in the latest plan – they simply adopt a ‘let’s worry about it when it arrives’ response. Clearly, this can’t be the approach for superannuation if the objective is a comfortable retirement for all Australians.

For super, the plan for the arrival of the retirement tsunami needs to be right – and the time to get it right is now. Superannuation has been subject to more than its fair share of tinkering by various governments over the years and this has eroded the confidence of Australians saving for their retirement through superannuation. More changes in recent years have resulted in many people being slugged with severe excess contributions tax penalties when they were simply trying to save for their retirement following the ‘new rules.’ Who wouldn’t lose confidence in the system?

So, as the government finalises its response to the Cooper Review into Australia’s superannuation system (we’re expecting a response before Christmas), one would hope that both sides of politics use this last opportunity to get it right. The message is simple: fix super in the best interests of Australians, and then leave it alone.

We have an obligation to overlook political short-termism for the benefit of Australia’s retirement savings in the future. After all, tomorrow’s budget balancing act will be acutely felt when the largest cost to government comes from supporting retirees via the aged pension and the health system. Indeed, the Mexican standoff over super serves no one.

More than an exemption

The last couple of months have seen many Chartered Accountants become increasingly engaged with the Institute as word spreads about the removal of the accountants’ exemption. It is an issue that certainly has many members “hot under the collar”. However I was surprised by the number of Chartered Accountants who weren’t fully aware of exactly what the accountants’ exemption is and the limitations it has in its application. (Yes, it still “is” – the removal is not due to take effect until 1 July, 2012.)

The accountants’ exemption refers to the ability for recognised accountants to recommend the setup or closure of a Self-Managed Superannuation Fund (SMSF) without the need to operate under an Australian Financial Services License (AFSL).

Interestingly, the only reason we need the accountants’ exemption is because SMSFs are considered or viewed as a financial product, which would otherwise require an adviser to operate under an AFSL.

My view is if SMSFs were more appropriately classified as a structure, not a product, the accountants’ exemption wouldn’t be required at all – it is the underlying investments that are financial products, not the SMSF itself.

The other difficulty with the legislation is that it doesn’t talk about an accountant advising a client NOT to set up an SMSF; nor does it allow accountants to explore alternatives for superannuation savings. In terms of structural, tax and asset protection advice, accountants need to be able to talk about SMSF as a viable alternative to other structures, such as companies and trusts, to potentially hold and grow assets.

Clearly, accountants need to talk about SMSFs with their clients but they also need to talk about a whole lot more! Accountants, as trusted professionals, are well placed to provide simple, affordable, non-product financial advice and have a significant role in ensuring Australians are able to gain access to advice when they need it.

This issue has had quite a bit of attention in the public domain – you may have seen an article I wrote in the recently released Spring 2010 edition of SMSF Magazine, entitled ‘Exempt No More’.

What kind of advice do you think accountants should be allowed to provide their clients? I would love to find out more about what our members think about this issue – please feel free to share your thoughts.

Re-engaging youth: a ‘super’ problem

Throughout the Cooper review process, the issue of disengagement with superannuation was frequently raised and debated. It was widely acknowledged across the industry that younger Australians tend to be particularly disengaged. The reasons for this appear to be varied:

‘Super is too complex.’
’I’m not retiring for another 50 years.’
‘I’ve only just started my career, why would I think about retirement?’
‘I don’t earn enough to worry.’
‘I’ve got better things to spend my money on!’

Anyone involved in superannuation and the broader accounting and financial services industries understands the benefits of starting early to save for retirement. Older Australians often regret their late consideration of superannuation. The question is, how do we get the message of early saving in superannuation through to younger people? Just as importantly, how do we get them to care?

Education is a large part of the answer. Students should be taught about financial literacy in schools. This is important to ensure students understand basic financial concepts, including superannuation. Younger Australians need to be aware of the benefits of starting to save for their retirement from early in their working lives.

However, education can only go so far. Let’s face it - I can teach my kids about all the great benefits of broccoli; it doesn’t mean that they will eat it!

I’m curious to know what others have to say on this issue. In an age of instant gratification, does there need to be a more immediate and relevant incentive to start saving? (Tax incentives to a low income earner may not be very appealing.) With an ageing population, we cannot over-emphasise the importance of superannuation. Unfortunately, if Australians don’t start to engage with their super early in their working life, it may be to their detriment in retirement.

Superannuation: ‘leaking revenue’?

I recently read the “red book” - a document that Treasury provided for the returning Gillard government. The red book’s purpose is for Treasury to identify the economic pressure points for the new government. While many of their points were interesting, I found the comments by Treasury on superannuation frustrating. They stated that “the superannuation system is increasingly leaking revenue, with Self-Managed Super Funds now the tax minimisation vehicle of choice”.

With SMSFs finally being ratified as a “largely successful and well-functioning” sector of the superannuation industry by the Cooper Review, it concerns me that the comments from Treasury may have a negative impact on the sector. With many of the misconceptions about SMSFs finally being put to rest, it is perplexing that Treasury would imply that those with SMSFs somehow have access to special rules or are otherwise abusing the system.

Let’s be clear - there are no special tax laws available uniquely to SMSFs that currently enable some sort of “tax rort”. SMSFs access the same tax laws as all types of superannuation funds, albeit that they are generally able to manage and utilise them more effectively than their larger counterparts. Furthermore, to refer to the use of legitimate tax laws that are available to any taxpayer as “leaking revenue” is inflammatory and misleading.

Early in 2010, the Cooper review identified SMSFs as a strong and robust sector of the super industry. After many years of public scrutiny, this greatly improved the perception of SMSFs. Any implication that SMSFs are somehow cheating the government of revenue will only encourage old prejudices and bias to resurface.

Why audit SMSFs?

The National SMSF Conference 2010 is continuing today and I’ve been having a great time attending sessions and meeting members. Feedback has been really valuable – members really appreciate the opportunity to hear from experts and build up their skills in the SMSF sector.

Yesterday, I attended a panel session on auditor independence. Interestingly, during the Q&A session, panellists were asked why do we need to audit SMSFs at all? While the answer may seem obvious to members, it may not be for some of your clients.

The first and most apparent reason to audit SMSFs is that it is required by law. However, while not all laws appear to stem from sound policy principles, I believe this one does. There are some good reasons for auditing SMSFs, not least of which is that it is in the public interest.

As you know, an SMSF has access to significant tax concessions. It is therefore essential for the public (and the regulator) to be comfortable that each fund abides by the law to ensure paying tax remains a fair and equitable process for all. An independent audit is an important part of this process.

What many people don’t realise, however, is that many SMSF trustees find a lot of value in the audit function. An auditor can provide independent and beneficial advice for trustees, extending their service beyond the role of compliance to one which helps trustees keep their fund on track and address any areas of concern as they arise.

The SMSF sector continues to show strong growth. The audit function is central to ensuring SMSFs can be used (not abused) effectively to maximise retirement savings for many Australians.

What do you think? Do you find auditing SMSFs a positive process?

National SMSF Conference - opening thoughts

What a great start to the National SMSF Conference this morning! It’s taking place at the beautiful Hilton Hotel in Sydney and over 300 members are participating.

Neil Olesen from the Australian Tax Office kicked the morning off with an update on the regulation of SMSFs. He pointed out that in 1999, there were 190,000 SMSFs in Australia and today that number has increased to 430,000. This suggests that Chartered Accountants will continue to work with more and more SMSF trustees and the opportunities in this sector are growing at a considerable pace.

David Shirlow, the Executive Director of Macquarie Bank gave us all an update on superannuation policy developments. Happily, he doesn’t think a change in government minister (from Bowen to Shorten) will slow down the implementation of the Future of Financial Advice reforms and expects it to be effective from 1 July, 2012. David said the Cooper Review recommendations around SMSFs were generally positive.

I don’t entirely agree with David – I think some of the Cooper recommendations need a lot more scrutiny. Let’s not forget there are different ways of achieving the objectives Jeremy Cooper is trying to achieve in the SMSF space. More on that later.

There are more exciting sessions to come today and tomorrow. I am enjoying the opportunity to meet with members and to hear their thoughts and ideas on superannuation. Please feel free to share your views about the conference or SMSFs in general, either in person, via this blog or by email.

Stepping up for the National SMSF Conference

The Institute is hosting its first National SMSF Conference on 23-24 September in Sydney. It’s a timely event given the announcement of our new federal government. Presumably, the Cooper review now remains on the government’s agenda and with it, the recommendations that may impact on many SMSF service providers.

Change is not new to the superannuation industry and it’s fair to say there will be more. This event will help arm practitioners with the right information so they can prepare for any changes on the horizon.

If you remember, Jeremy Cooper reported that the accounting profession is best placed to deal with competencies in the SMSF accounting and administration space – this conference illustrates the Institute’s willingness to provide quality training events for its members and the broader SMSF community.

I’m particularly looking forward to the panel discussion at the end of Day One of the conference. The panel, made up of luminaries from the audit world, are holding a session titled, Auditor independence – where do you draw the line of independence? This is topical because of Cooper’s suggestion that “true independence” is required in the SMSF sector.

As I have said before, competencies and independence are important in any audit – not just in the SMSF sector. But while Cooper’s objective to achieve high levels of competencies and independence is to be supported, the question is, will his recommendations meet the desired objectives?

The panel discussion promises to shed some light on this. There will also be opportunities for delegates to ask questions, so I am interested to hear what others think!

Other highlights from the Conference include ATO presentations on issues of concern to the regulator as well as some insights into “auditing the auditor”. Updates on major areas of interest for SMSF service providers including borrowing, deeds, tax and practical uses for SMSFs will be invaluable. Importantly, everyone will have opportunities to network with others working in the SMSF world.

So come along, this is an opportunity not to be missed.