The Australian Self managed Super Fund Members' Association (ASMA) has labelled the Federal Government's compensation package offered to four superannuation funds which lost money in the collapse of Trio Capital as an appalling case of unfair discrimination because it did not include self-managed superannuation funds (SMSFs).
Of real concern was the statement from the Minster for Superannuation Bill Shorten that SMSF members benefit from controlling how their money is invested, according to ASMA executive director Simon Makeham.
"SMSF members aren't seeking handouts. Indeed they are planning for their own self funded retirement. All they ask for is a level playing field. And as we can see from the Trio Capital bailout it's far from a level playing field at the moment," Makeham said.
He made a point of emphasising SMSF members currently did not have the same protection under the law that members of other types of superannuation funds do.
"Regardless of what the legislation says, superannuation is superannuation. It is grossly unfair that the same compensation is not offered to all those who have suffered a loss due to fraud or malfeasance. Just as professional advisers and trustees are not in a position to identify fraud or other criminal activity before making an investment, nor can members of self managed funds," Makeham said.
Shadow Minister for Superannuation Mathias Cormann said the situation highlighted the need for people to understand all of the risks linked to superannuation investments.
He felt the situation also identified a need to look at the compensation legislation that was drafted when the SMSF sector made up an insignificant part of the market, unlike today where it holds a 32 per cent share.
"In light of the strong growth in the SMSF sector this whole issue should be looked at again as a part of the modernisation of the super industry," Cormann said.
"We need to make sure we have the balance right between appropriate consumer protection and the capacity of individual Australians to take charge of their own retirement planning and maximise their opportunities by self-managing their super."
