Author: Jason Roccasalvo, Partner, TAG Financial Services
In terms of superannuation, Tuesday’s Federal Budget responded to the recommendations of the Hayne Royal Commission (2018) around poor performance and fund transparency, announcing that from 1 July 2021:
- An existing superannuation account will be ‘stapled’ to a member (follow you) to avoid the creation of a new account when that person changes employers.
- An online YourSuper comparison tool will be created to help members decide which super product best suits their needs.
- MySuper products will be undergo an annual performance test. Funds that underperform will need to inform their members. Funds that fail two consecutive performance tests will not be permitted to accept new members until their performance improves. Other funds will be subject to this test from July 2022.
For Self-Managed Superannuation Funds, the ATO have already been making significant noise about “lazy” funds, i.e. that are inactive, retain large amounts of cash, or hold investments that are underperforming. Expect this to ramp up over coming years.
One of the most common reasons people choose SMSFs is to provide investment control. Taking control and actively managing your retirement wealth means different things to different people. There is no one size fits all in terms of appropriate investment.
What should be non-negotiable is understanding your retirement goals – and how will you attempt to achieve them.
Without a plan – what have you really got control over and is it working for you?
If you can’t articulate and show your plan, then how will you ever be able to achieve your desired outcome.
SMSF Trustees have the control – so make sure you use it.
As always, if you have any questions, please contact us on 03 9886 0800 or via email.
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Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686).