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Cooper Review SMSF Report: Summary and Commentary

4 May 2010

Background

On Thurday 29 April, the Cooper Review into superannuation released its report into self managed super funds (SMSF). This report is very important because it's been clear for some time that there has been intense lobbying by politically connected industry and retail super funds to close down or make life difficult for SMSFs. The motivation is clear from our perspective. Industry and retail funds want to force people who run their own SMSF to shift the money to them. Look at the figures:

There are
  • 67 Industry funds with $219 billion in assets and 16.6 million members.
  • 154 retail funds with $346 billion in assets and 11.6 million members
  • 420,000 SMSFs with $386 billion in assets and 800,000 members
In industry and retail super funds other people control your money.

With SMSFs you control your money.

Industry and retail funds would surely love to get their hands on at least some of the billions in SMSFs. The surest way to do this is to convince the federal government to introduce complex regulations on SMSFs that massively increase the cost and difficulty of your administering your fund. They could do this, for example, by requiring you to have formal accounting qualifications of some sort. The industry and retail funds have been making these sort of arguments.

The Cooper Review was set up by the Rudd Government to review all superannuation. Its third report, just released, is into SMSFs and makes recommendations. Fortunately, the report is highly supportive of SMSFs continuing and should even improve ease of administration.

A summary and commentary by ICA member Allen Cummings on the Cooper SMSF report is available as a PDF here. Our thanks to Allen for doing this! The views are his, but he makes a lot of commonsense. (You'll note in his commentary that Allen also seems to be bit of a cricket 'tragic'! Go Aussie!)

BUT, let's be clear about the continuing political risk to SMSFs. No one should underestimate the political clout of the industry and retail super funds. The Cooper report seems positive, but what the government will do is still unknown.



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