Unlike their counterparts at the big end of town, the trustees of SMSFs were given a glowing endorsement by Senator Jane Hume, the assistant minister for superannuation, at the SMSF Association annual conference this week.
Her conference speech on the first day of the two-day virtual event (February 16) probably would have drawn rapturous applause at a normal face-to-face event. She said that SMSFs represented an integral part of the superannuation industry and the Government was keen to support the sector.
The speech, her first directed to the sector specifically since gaining her portfolio as a junior minister, was in stark contrast with her recent communications and statements about big super funds, particularly industry funds, which have invariably been peppered with calls for under-performers to be “weeded out”.
Joining the senate in 2016, Senator Hume was made the Minister for Superannuation, Financial Services and the Digital Economy in May 2019.
Quoting the SMSF statistics as at September 30 last year – 591,000 funds with accounts totalling $728 billion under management – Senator Hume said: “The driving force behind these numbers is Australians’ desire to be masters of their own destiny, to control their own personal retirement incomes. That’s something we as a government wholeheartedly endorse. We want more people to take an active interest in their personal finances and retirement savings.”
She said that the Government would be working with the SMSF Association to improve retirement needs and strategies for members. She said that industry providers should not wait for the Government’s direction to take action on providing new strategies now.
Referring to the Retirement Income Covenant, first proposed in 2018 and delayed, last December, from taking effect until July 1, 2022, she said it was imperative that trustees of all funds supported their beneficiaries by developing strategies that carefully consider the retirement income needs and preferences of different cohorts of their members.
“That is what the Covenant is about,” she said. “Having a strategy for retirement is as applicable to self-managed super fund members as it is to members of large funds.”
She has recently joined the industry more broadly voicing her concerns about the retirement segment of the industry, especially the long-time problem of retirees’ lack of trust in the system such that they tend to under-spend their capital and live too frugally.
In a speech to primarily fund managers and other service providers on January 28, also via video link, she urged self-funded retirees to tap into their capital rather than the tendency for them to spend only their income, where possible.
Last September she lashed out at industry funds for boasting about their significant investments in Australian infrastructure, saying “it’s not your job”.
In November she said that the Government would crack down on the way industry funds spent their money on advertising, saying they should be subject to the same restrictions as public companies – a comment which bemused both the funds and corporate commentators.
Earlier, in June last year, she said the compulsory nature of super meant that big funds had become lazy and inefficient.–