17/10/2018 SMSF ASSOCIATION WELCOME REMARKS AND POLICY UPDATE JOHN MARONEY CEO SMSF ASSOCIATION. John Maroney, CEO, SMSF Association

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1 REMARKS AND JOHN MARONEY CEO John Maroney, CEO, Association John Maroney was appointed as the CEO of the Association in May John has worked in the financial services industry for over 30 years and was recognised as a leader in Australia s Financial Services sector before his appointment to the International Association of Insurance Supervisors in Most of John s experience in Australia has been in the superannuation or insurance sectors and managing professional and industry associations. He is passionate about helping all Australians to be better prepared for a secure and dignified retirement, especially those who have chosen to utilise self-managed superannuation funds as the main component of their retirement saving. John is thrilled to have been selected as the CEO of the Association and to now have the opportunity to boost the Association s recognition as the peak professional body and its representation of the more than one million trustees. John s experience includes extensive senior management and consulting roles in superannuation, insurance, Australian and international financial regulation, actuarial and risk management plus managing professional and industry associations. He has been employed by large and small employers and consultants, within the private and public sectors, within Australia and internationally and he also was self-employed for several years while he developed a successful consulting firm. Key roles include CEO of the Actuaries Institute, Australian Government Actuary and Head of Capital and Solvency at the International Association of Insurance Supervisors, which is hosted by the Bank for International Settlements in Basel, Switzerland. 2 1

2 Welcoming remarks Welcome About the Association Today s conference About the Trustee Knowledge Centre Sector update 3 Thank you to our event sponsors 4 2

3 Thank you to our Trustee Knowledge Centre sponsors 5 The Space: What to keep your eye on and super legislation changes Three yearly audits Increasing s from 4 to 6 members Electronic rollovers to s Insurance and superannuation Work Test exemption for recent retirees ALP Franking Credit Proposal Association Policy priorities 6 3

4 Three-yearly audit cycle for some self-managed superannuation funds The Government is proposing to change the annual audit requirement to a three yearly requirement from 1 July Fund must have: A history of three consecutive years of clear audit reports Have lodged the annual returns in a timely manner Reducing costs must be balanced with protecting integrity of the sector 7 Three-yearly audit cycle for some self-managed superannuation funds Association concerns re the proposal: Will not reduce costs for trustees Will make the law more complex due to eligibility criteria Will reduce important role of auditors in ensuring funds are compliant Undermine integrity of the sector Recommended that Government should not proceed or rework to include an annual compliance check for eligible funds 8 4

5 Increasing the maximum number of allowable members in s and SAFs from four to six Apply from 1 July 2019 New s and existing funds Allow greater flexibility for families and small businesses May insure against ALP franking credit proposal 9 Electronic rollovers to s From 30 November 2019 s will have rollovers to and from large funds conducted via SuperStream Employer contributions also made via using SuperStream More efficient and timely rollovers s that do not have a need to enter SuperStream no employer contributions or rollovers will not need to meet the requirements E.g. funds in pension phase will not need to do anything 10 5

6 Protecting Your Super Package changes to insurance in superannuation Insurance will become opt-in for: Members with balances of less than $6,000. Members under the age of 25 years. Members whose accounts have not received a contribution in 13 months and are inactive. Applies from 1 July 2019 impact: 40% of members have large super fund accounts, often to maintain an insurance policy. Must keep account active and make regular contributions to ensure insurance policy does not cease. Consider automatic annual rollover from to large fund where insurance is held 11 More Choices for a Longer Life work test exemption for recent retirees From 1 July 2019, Govt will introduce an exemption from the work test for: Voluntary contributions to superannuation For people aged with superannuation balances below $300,000. In the first year that they do not meet the work test requirements. Gives recent retirees additional flexibility to transition to retirement. Association currently working through draft legislation. 12 6

7 ALP Franking Credit Policy Labor, if elected, will deny franking credit refunds for superannuation funds and individuals. Although targeted primarily at s, some APRA-regulated funds and some non-working and low-income individuals will also be adversely affected. The A strongly opposes the proposal. Will severely damage the retirement plans of many Australians who have prudently saved for retirement through an and planned for refundable franking credits. 13 A Policy position on ALP franking credit proposal Distorts the dividend imputation system Impacts on retirement incomes $5,000 loss of income from the median retiree earning about $50,000 a year in retirement income The Pensioner Guarantee does not protect many s s with a member who starts receiving a pension after 28 March are still affected May place some members in a worse position than people with less savings 14 7

8 A Policy position on ALP franking credit proposal Distorts asset allocations Trustees may look towards property or foreign investments Encourages the drawdown of capital and reliance on the aged pension Overstatement of revenue benefit Uncertainty of superannuation rules 15 Association Policy Priorities Alliance for a Fairer Retirement System (AFRS) To explore options to fix problems with the existing superannuation taxation, Age Pension means testing and broader retirement income systems. Comprises: Australian Shareholders Association Australian Listed Investment Companies Association National Seniors Australia Association Self-managed Independent Superannuation Funds Association Stockbrokers & Financial Advisers Association Association of Independent Retirees Australian Investors Association / Financial Planning Association Association of Financial Advisers Gold Coast Retirees West Australia Self Funded Retirees Inc 16 8

9 Association Policy Priorities Alliance for a Fairer Retirement System lobbying strongly against franking credit proposal Hosting a Summit on the policy in Sydney on 30 October House of Representatives Economic Committee Inquiry opportunity to have voice heard on the issue via submissions 17 Association Policy Priorities Productivity Commission draft report on superannuation Made draft finding that s only appear cost effective with a balance of at least $1 million Association strongly dispute this draft finding Poor data used, flawed investment return methodology, disregards tax effectiveness of establishing an early, misunderstands motivations of control and transparency important to trustees Association does not want any additional barriers to s being introduced due to the report 18 9

10 Association Policy Priorities Better integration of superannuation and social security policy Legislating the objective of superannuation Single comprehensive age pension means test Increasing incentives to save Women in super Policy solutions to close the superannuation gap between men and women in retirement 19 ABOUT About the Association The Association is an independent organisation focussed on informing, educating, empowering and advocating for all Australians who self manage their superannuation. We believe that every Australian has the right to control their own destiny, and to create a good quality of life in retirement. Further to that, we believe better outcomes arise when professional advisors and trustees are armed with the best and latest information, especially in the growing and sometimes complex world of s. Disclaimer This presentation is for general information only. Every effort has been made to ensure that it is accurate, however it is not intended to be a complete description of the matters described. The presentation has been prepared without taking into account any personal objectives, financial situation or needs It does not contain and is not to be taken as containing any securities advice or securities recommendation. Furthermore, it is not intended that it be relied on by recipients for the purpose of making investment decisions and is not a replacement of the requirement for individual research or professional advice. Actions, reactions and interpretations cannot be relied upon. The presentation is purely the opinion of the presenter on the day and this presentation is record of that opinion. This presentation was accompanied by an oral presentation, and is not a complete record of the discussion held. No part of this presentation should be used elsewhere without prior consent from the author Association Pty Ltd 20 10