POWERED BY MOMENTUM MEDIA
SMSFs not irresponsible on borrowing
The SMSF Professionals' Association of Australia (SPAA) has sought to dismiss any suggestion that there has been exponential or irresponsible growth of borrowing within self-managed superannuation funds (SMSFs).
Commenting on recent data released by the Australian Taxation Office (ATO), SPAA technical and professional standards director Graeme Colley said that what had to be understood was that although SMSF borrowings increased from 1.1 per cent a year in 2008 to 3.7 per cent in 2012, this percentage still only amounted to 3.7 per cent of the total SMSF asset pool of more than $500 billion.
"This hardly suggests that trustees are borrowing without giving it due consideration," he said.
"SPAA's understanding of the current situation is that borrowing has not increased significantly since 2012 and remains a very small proportion of the total value of loans made by banks and other financial institutions," Colley said.
He said the lending criteria placed on superannuation funds that borrowed for limited recourse borrowing arrangements was more stringent than loans taken out by individuals for residential property and commercial property.
As well, Colley said that 90 per cent of borrowing took place in the accumulation phase rather than the pension phase.
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
DomaCom DFS Mortgage
92.15 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
53.24 3 y p.a(%)
3
Global X GlobalX FANG+ ETF
43.15 3 y p.a(%)
4
DomaCom Shoreline North Coogee
36.26 3 y p.a(%)
5
GAM LSA Private Shares AU I
35.87 3 y p.a(%)
