One of the main motivating factors behind the Cooper review not wanting to increase the maximum number of members allowed in a self-managed superannuation fund (SMSF) was the unwillingness to implement another arbitrary rule in the sector, according to one of the review panel members.
“The reason we pulled back from changing that first of all was that four is a completely arbitrary number, so is five, and so is six, so is 10 and so is, in a way, a family definition … and whatever definition you come up with you’re not going to come up with the perfect definition,” Heffron Consulting principal Meg Heffron said.
“So we didn’t have anything logical to move to.”
Furthermore, Heffron said the panel did not want to create a situation where SMSF trustees would be making decisions regarding other people’s money as opposed to just their own simply due to an allowed increase in the number of fund members.
“If you’re going to start making decisions about somebody else’s money, that really should be a prudentially-regulated system like the APRA (Australian Prudential Regulation Authority) system,” she said.
Another area where the review made no new recommendations was regarding access to the Superannuation Complaints Tribunal (SCT), even though the preliminary report from the panel had indicated it would.
“We got a lot of helpful feedback about that in late June and people said what that would result in was a charge on all SMSFs for something only a few people could use,” Heffron said.
“So the suggestion was made to us that the recommendation sounds nice in theory, but it’s not actually going to be of any practical help.”
