The Super System Review has released MySuper: Optimising Australian superannuation. This preliminary report provides more detail on ‘MySuper’ which is the new name for a universal product concept.

Some of the proposed features of MySuper include:

• A ban on trailing commissions;
• No contribution fees;
• A new duty on trustees to manage the overall cost to members;
• A default post-retirement product;
• Trustee duties focused entirely on looking after the member.

MySuper would not be a separate default fund. It is designed to be a simple, cost‐effective product with a diversified portfolio of investments for the vast majority of Australian workers (shown to be above 80 per cent of members) who are invested in the default option in their current fund.

It would not prevent Australians from electing to have a fund that offers more choices and options, or want to manage their own super in a self-managed super fund (SMSF).

It is probable that a number of the changes proposed to apply to MySuper – such as the prohibitions on contribution fees and trailing commissions and the requirement to renew advice arrangements every 12 months – will also be recommended to apply in other superannuation sectors, including to SMSFs.

The Australian Taxation Office published a new ruling, SMSFR2010/1 on 25 February 2010 that explains the Commissioner’s views on the application of superannuation laws to the acquisition of an asset by a self-managed superannuation fund (“SMSF”) from a related party. The ruling replaces a previous draft ruling published on 2 April 2008.

Under superannuation law, a trustee or investment manager of a SMSF is prohibited from intentionally acquiring assets (other than money) from a related party of the SMSF, unless an exception applies. There are various exceptions which allow a trustee or investment manager to accept money or to acquire listed securities, business real property, certain in-house assets and certain assets specifically excluded from being in-house assets.

The Ruling explains certain requirements of the exceptions. It also clarifies that a trustee or investment manager accepts money from a related party if the substance of the transaction is to directly transfer funds held by the related party to the SMSF.

The Ruling attempts to define the scope of the term ‘acquire an asset’ including characterising what is acquired and the acceptance of money by a trustee or investment manager. It includes guidance on characterising what is acquired and considers the performance of a service and the acquisition of rights arising under a contract – for example, an option agreement.

For more information contact Katrina Nitschke.