Key information released on SMSFs

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The ATO has released the statistical report on SMSFs for the period 2010-11, and it shows the continued popularity of the SMSF sector.

Around 26,000 new SMSFs have been established each year since 2008, with over $440bn in assets in the sector.

Key findings in the 2010-11 report included:

  • Contributions to the SMSF sector averaged $26.5bn a year over the four years to 2011, with member contributions exceeding employer contributions approximately two to one.
  • The major asset holdings continue to be in cash and term deposits and Australian listed shares (a total of 60%)
  • Smaller SMSFs continue to favour cash and term deposits
  • The average SMSF member balance is $506,000
  • The estimated operating expense ratio for SMSFs continued to decline in 2010-11 from 0.65% in 2008 to 0.54% in 2011
  • About 64% of SMSFs are solely in the accumulation phase, however there is a clear shift for more recently established SMSFs to commence pension payments sooner

Tax agents and accountants have played a large role in the SMSF sector, with approximately 12,500 tax agents or accountants lodging 98% of 2011 SMSF annual returns.

With the trend towards SMSFs seen as a consequence of low consumer confidence, Minister for Financial Services and Superannuation Hon Bill Shorten said the Gillard Government had undertaken measures to improve the integrity and increase community confidence in this sector.

Legislation was passed in Parliament to establish an SMSF Auditor Registration Regime, which will require auditors to register with ASIC and meet initial and ongoing requirements relating to their qualifications, competency and independence.

In the year ending 30 June 2011, around 10% of SMSFs said their approved auditor also provided other services, such as a tax agent, accountant, financial adviser or administrator. This has been a steady decline in the last four years.

Parliament also looked at giving the ATO powers to address wrongdoing and non-compliance by SMSF trustees, and capturing roll-overs to SMSFs as a service under the AML/CTF Act to stop superannuation benefits being used for illicit purposes.

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