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Self-managed super funds (SMSFs) are an increasingly popular component of Australians’ retirement maximisation strategies but government reform is needed to rectify several flaws limiting their use and potential, national accounting firm Chan & Naylor has claimed.
According to the firm, SMSFs represent approximately one third of the total superannuation pool; ATO statistics place the number of SMSFs nationally at 439,397.
However, while Chan & Naylor believes SMSFs are likely to accelerate in popularity they say government reform is required to fix a number of serious problems as well as create best practice.
According to Chan and Naylor the government needs to reconsider the arbitrary maximum limit of four members to each SMSF, the 93 per cent potential tax penalty applied to over payment of super contributions and the current age limits which can restrict members from contributing to their superannuation.
Among other things, Chan & Naylor also believes legislation which prohibits SMSF trusts from acquiring property and undertaking renovations while debt is still owed needs to be reconsidered.
"None of the above factors assist in the fundamental and bedrock sole purpose test of superannuation, which is to provide retirement income for members," said Ken Raiss, director of Chan & Naylor.
"The unsaid word here being maximise."