Why big super's pseudo-SMSF won't deliverBY KRIS KITTO | FRIDAY, 7 MAY 2021 11:55AMAs the success of SMSFs boomed in the last decade, some industry funds rolled out self-directed or member direct investment options that allowed their members to invest (with ... Upgrade your subscription to access this article
Join the growing community of superannuation
professionals with unlimited access to our latest news, research and analysis of the industry.
Become a premium subscriber today. |
Latest News
Mega super fund opens first international office
Australian Retirement Trust (ART) has opened its first international office in London to build out a "leading global investment capability."
Aware builds property portfolio, adds 726 homes
The super fund will add more than 700 homes to Melbourne's housing market across two new developments.
Actuaries Institute proposes new performance test measure
The Actuaries Institute has proposed revising the annual superannuation performance test, so it better aligns trustees' investments with the best financial interests of members.
OneSuper to take on more super products
Following on from the news that it would now be home to Spaceship Super, OneSuper will further bolster its funds under management through the transfer of another sub-plan, home to several super products.
Cover Story
The super, super fund
DEANNE STEWART
CHIEF EXECUTIVE OFFICER
AWARE SUPER
CHIEF EXECUTIVE OFFICER
AWARE SUPER
Aware Super has marked its expansion into Europe with the grand opening of its London office.
Thankyou Kris for your insights. To address your suggestion that big super funds pull money out of investment portfolios to cover future tax liabilities: in fact, they don't - they create an accounting provision for deferred taxes in valuing member accounts but this accounting liability is not backed by cash. It is essentially a gearing effect as the money remains invested to earn compounded returns until the tax is actually payable. This is really the same as SMSFs; it's just that the deferred tax liabilities are made explicit in the member account valuation. The point is that both types of funds can earn compounded investment returns until the tax actually has to be paid.
Just wanted to point out this article is inaccurate and probably misleading. Pseudo-SMSFs let each member who chooses to use them to accumulate unrealised gains just like an SMSF. Additionally some of them also allow members to transfer their investments in specie to the retirement phase and to directly benefit through the unrealised gain provision being removed boosting the balance available for retirement income.