Fund manager forms petition to keep franking system

Plato Investment Management has started an online petition to maintain Australia’s dividend imputation system, saying that any change in the rules would be unfair to self-funded retirees and low-income earners.

The fund manager said the petition already had over 500 electronic registrations.

“We can’t keep tinkering and changing the system for those already in retirement,” said Plato managing director, Dr Don Hamson.

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Plato said proposed changes to the system by the opposition Labor party discriminate against mature super funds, particularly self-managed super funds (SMSFs).

The manager said its analysis implies that super funds with more than 70 per cent of assets in pension mode will likely lose some of the value of franking credits.

The proposed change will have the greatest impact on self-funded retirees who fall just outside the assets test thresholds - $837,000 for a couple who are home owners or $556,500 for a single person who owns a home, Plato said.

Hamson said such a change could see SMSF members reduce their investments in Australian share in favour of global equities, property and even cash.

“Labor’s proposal could also result in SMSFs circumventing changes by transferring the Australian equities part of their portfolio to a ‘wrap’ type of fund that will then be able to refund the imputation credits,” he said.

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