If you read the business section of the newspapers recently, or keep track of the financial news on the television, you may have heard about the push by a few industry groups within the superannuation sector to tighten the entry requirements for
Let’s be very clear what this issue is about. Legitimate SMSF
The fraud is a result of local and overseas scammers fooling the large super funds into handing over cash from members’ accounts, and the unwitting involvement of the ATO due to flawed administration systems.
The extent of the super fraud is unclear, but the theft of millions of dollars of members’ money from super accounts held by large super funds is unacceptable. Most large super funds have antiquated systems that are paper-based and unwieldy, which make them easy targets for crime gangs. So, rather than improve internal systems, they seem to be squealing to the ATO (which unfortunately is part of the issue in this instance) that the Government must make it harder for legitimate SMSFs to be established. Huh?
For example, say you were a member of a large super fund who was merrily getting on with your life. Your super fund contacts you to report that your retirement savings have been stolen by a crime gang. Not to worry, the super fund is encouraging the ATO and the Government to make it harder to set up a SMSF?
Are the crime gang running a SMSF? Not anymore. So, where has the money gone? Probably out of the country. So, what does a SMSF have to do with the super fund letting my money be paid out to criminals? The criminals stole your identity, and then used your identification to set up a SMSF. Your super fund then paid your retirement savings into a bank account unrelated to the SMSF.
If the operators of a large super fund believe a fraud is being committed, or believe that their systems are vulnerable to fraud, then they have a responsibility to fund members to put measures in place to minimise that risk.
As the banks can attest, it is impossible to totally eliminate fraud but the large super funds can do a lot more to protect the billions of dollars held in super accounts on behalf of Australians.
This is very similar to the financial services industry moving the spotlight to accountants after all those financial investment disasters floated to the surface.
It makes you wonder about the credibility of trustees running these large super funds, scammers expose the venerability of their IT systems so they poke fingers towards the SMSF sector – many of who are mums & dads.
The Government’s primary focus with superannuation is the retail sector, to transfer wealth (super & savings) from the pockets of Australians into the Big Five (4 major banks and a large life insurer) so they will welcome any opportunity to make life harder for the black sheep of superannuation – SMSF trustees.
Don’t forget to put a lock on your postbox especially during the reporting season.
Cheers