Institute of Chartered Accountants of Australia (ICAA) head of superannuation Liz Westover has hit back at the negative sentiment around the continued strong growth of the self-managed superannuation fund (SMSF) sector, stating the ongoing expansion was a positive for the industry as a whole.
"The flow of funds into the SMSFs is not a problem for the superannuation industry," Westover said at yesterday's ICAA National SMSF Conference 2012.
"It may be an inconvenient truth for some of the larger APRA (Australian Prudential Regulation Authority) funds but in most cases it is a demonstration of engagement in superannuation and a desire [of people] to take control of their retirement savings.
"This is a positive outcome. This is actually what we're fighting for.
"We want people to engage in financial literacy, we want them to be engaged in superannuation and their retirement savings so the fact they may do that through the SMSF model is a really positive outcome."
Westover also took the opportunity to dispel the other common perception that SMSFs received preferential tax treatment compared to other retirement saving sectors.
"SMSFs do not have any special tax treatment. All funds have access to the same tax laws," she said.
"Making the most of these opportunities within the bounds of the law to enhance retirement savings should be encouraged, not criticised."
In addition, Westover made it clear SMSFs were closely scrutinised by the Australian Taxation Office (ATO).
"SMSFs are regulated despite what some of the commentary would suggest. In fact they are subjected to close monitoring by our regulator the Australian Taxation Office," she explained.
"Every fund is subjected to an annual audit."
Westover supported her argument by pointing out the Stronger Super review examined the SMSF sector very closely and was found to be functioning well.
