Self managed super funds (SMSFs) will be forced to have minimum balances of somewhere between $150,000 and $250,000 under new government regulations rumoured to be on the way.
Speaking at the Self-Managed Superannuation Fund Professionals' Association of Australia (SPAA) conference in Adelaide yesterday, opposition minister for superannuation Chris Pearce said rumours around parliament had been that the 13-month review on self-managed super had been targeting minimum fund balances.
Barriers to entry into self-managed super funds were just one of the 23 areas the government was looking at through reviews into this sector, Pearce said.
The opposition view is that minimum balances are personal and have been somewhat self-regulating, with ATO statistics confirming a lower percentage of SMSFs were opening with balances of less than $100,000.
Pearce said the opposition was focused on superannuation adequacy, longevity risk and choice. While adequacy was a personal decision, longevity risk needed to be targeted with suitable product.
CPI-linked bonds were mooted by the minister as the most effective way of both helping the government through its budget shortfalls and making sure longevity risk was mitigated for the investor.
"Longevity risk is a growing issue in super, for both individuals and governments," Pearce said.
"By virtue of living longer more people will suffer shortfalls and become dependent on government pensions. We need to insure people from shortfalls through hybrid-style annuities offering fixed and variable income for retirees deep into their retirement."
According to Pearce, this would involve embracing traditional annuities.
