The Australian Securities and Investments Commission (ASIC) has rejected suggestions an obligatory minimum balance should be satisfied before an SMSF can be set up.
“We do not support introducing a mandatory minimum balance for self-managed superannuation funds, as we recognise that there are many situations in which establishing a low-balance SMSF may be in the best interests of members,” the corporate regulator said in its most recent submission to the Financial System Inquiry (FSI).
But while ASIC was against the introduction of a defined minimum asset balance for potential SMSF trustees, it did support the idea of providing guidance on what an appropriate minimum asset balance for SMSF establishment might be.
“However, there may be merit in introducing either a ‘soft’ minimum balance or guidance on an appropriate minimum balance,” the corporate watchdog said.
“This may mean, for example, that a minimum balance applies unless certain requirements are satisfied.
“An alternative is to provide guidance on an appropriate minimum balance for SMSFs, which could be strengthened by applying an ‘if not, why not’ disclosure requirement.”
ASIC was still keen on a review of fees though, saying it might “be timely to review fees and costs and the operation of fee-based competition for superannuation”.
Another initiative ASIC was in favour of was the introduction of default products for individuals in superannuation pension phase.
“This would support individuals entering the retirement phase of superannuation, as they transition from a compulsory saving environment with relatively high levels of protection, for example, through availability of default arrangements like MySuper or default investment options, to an environment requiring significant consumer engagement,” it said.