APRA eyes DIY funds
The Australian Prudential Regulation Authority (APRA) will now ensure that all superannuation funds, including self-managed super funds (SMSFs), which pay pensions are “subject to an appropriate level of prudential supervision.”
Changes to the Department of Social Security's assets test-exemption rules for income streams on September 20 last year have encouraged "a broader range of superannuation funds to enter the (pensions) market", the APRA announcement stated.
Grant Abbott, managing director of Grant Abbott Consultants, which advises a number of financial planners on SMSF strategies, says the announcement is "the best news we could get."
APRA has amended the SIS legislation to require all superannuation funds to produce an annual actuarial certificate that there is " a reasonable probability those pensions will continue to be paid under the governing rules of the fund."
"Now that there is clarity in the rules it will encourage more SMSFs to offer complying pensions," says Abbott. "All they need now is actuarial sign-off."
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