POWERED BY MOMENTUM MEDIA
KPMG gives qualified support to covenant
Major consultancy KPMG has backed the development of a Retirement Incomes Covenant on the basis that development of a Retirement Income strategy is an appropriate obligation to impose on self-managed superannuation funds (SMSFs).
In a response to Treasury’s Retirement Income Covenant Position Paper, KPMG partners, Paul Howes and Adam Gee, specifically pointed to the need for SMSFs to be included in the regime, noting that they understand that the development of a Retirement Income strategy will be the only principle that will apply to a SMSF “which is an appropriate obligation to impose on an SMSF”.
The KPMG submission, while broadly supporting the Retirement Income Covenant, has urged the need for greater levels of clarity around what is intended and has cautioned that there may be a need to amend both the Superannuation Industry (Supervision) Act and the Corporations Act.
“We note that the Corporations Act with regards to advice provision requires that the advice provider (such as a trustee) determine and have regard to an individual’s objectives and needs,” it said.
“Whilst it is proposed in this paper that the covenant will ask the trustee to consider the needs and preferences, both require needs to be determined and trade-offs to be made in developing a member’s advance needs and their retirement income needs.”
“Whilst an ‘objective’ is different to a ‘preference’ we query whether use of different terms are on purpose (perhaps to differentiate the different requirements in the different Acts) or if this is an oversight,” the KPMG response said.
It then suggested that guidance tools proposed in the discussion paper risked breaching the Corporations Act.
Recommended for you
The impact of identity theft and its threat to superannuation savings were highlighted in a case that went before the Federal Court at the end of 2023.
A recent NSW Supreme Court decision is an important reminder that while super funds may be subject to restrictive superannuation and tax laws, in essence they are still a trust and subject to equitable and common law claims, says a legal expert.
New research from the University of Adelaide has found SMSFs outperformed APRA funds by more than 4 per cent in 2021–22.
The SMSF Association has made a number of policy recommendations for the superannuation sector in its pre-budget submission to the government.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
