Tougher guidelines for releases to SMSFs
Major superannuation funds will be subjecting transfers to self-managed superannuation funds (SMSFs) to higher levels of scrutiny and checking, following new processes suggested by the Australian Prudential Regulation Authority (APRA) to help thwart illegal early releases.
APRA has signalled it will be writing to all superannuation fund trustees, providing them with guidance about the additional processes they should consider implementing to help verify the validity of transfer and rollover requests into SMSFs.
APRA said it had been working with the Australian Taxation Office (ATO) to address concerns about the increasing prevalence of illegal early release of superannuation.
It said that it was doing so in circumstances where SMSFs were being used as a device to allow money to leave the superannuation system illegally.
APRA claimed there were two types of illegal early release schemes: one involving the fraudulent use of a member’s identification by an unrelated party to steam the member’s benefits without their knowledge or consent, and the other where a member participated with a promoter to access the member’s benefits.
It said that, to date, evidence indicated that the schemes preyed mostly on people from non-English speaking backgrounds, as well as others who had a limited understanding of the superannuation system or were under financial distress.
Recommended for you
With just 30 per cent of Australians knowing their superannuation balance to the nearest $1,000, Findex has emphasised the role of financial advice in addressing the critical super knowledge gap.
Underestimating the cost of insurance by almost $75,000 in a Statement of Advice is among multiple reasons that a relevant provider has faced action from the FSCP.
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.