We’re different: Big super funds want retrospective protection
Major superannuation funds want to be retrospectively protected from exposure to the non-arm’s length expense (NALE) rules which apply to self-managed superannuation funds (SMSFs).
While new Government legislation will exempt large funds regulated by the Australian Prudential Regulation Authority (APRA) from the non-arm’s length income (NALI) regime announced in the 2023-24 Budget, the big funds want the Treasury to go further by providing them with retrospectivity.
The big funds have argued that the integrity rules which gave birth to the NALE rules “do not – and indeed cannot – arise in large APRA-regualted funds”.
The Association of Superannuation Funds of Australia (ASFA) has told Treasury that its member funds want to ensure that “the NALE rules can never have any application to large APRA-regulated funds (and exempt public sector funds) and that the NALI apply rules apply as they did prior to the introduction of the NALE rules”.
“The operation of the Bill as currently drafted is that the amendments will apply with respect to the 2023-24 income year and future income years.
“It is ASFA’s strong view that the repeal of the current sub-sections 295-550(1) (b) and (c) and (5)(b) and (c) should be retrospective, such that the repeal applies from 1 July 2018. The rationale for this view has been detailed in our prior submissions, and may be summarised as follows:
- The current contribution rules, including contribution caps, work well in a large fund environment to achieve the policy objectives of placing an upper limit on how amounts are contributed into the superannuation system (where they enjoy the benefit of a concessional tax environment).
- The introduction of the NALE rules (as they had the potential to apply to large funds) was not required, on the basis that the potential mischief that Treasury may have been concerned with was not possible in a large fund environment.
“We note that the compliance concessions announced by the Australian Taxation Office relate only to general expenses incurred by a superannuation fund from 1 July 2018 to 30 June 2023. Accordingly, large funds still have a potential exposure to this issue for that period in the event the compliance concessions provided by the ATO are not maintained.”
“Potential mischief…was not possible in the large fund environment”.
Erm… So all those administration and ancillary service business that “support” industry funds, paid for by the members of these funds and owned by union entities or union bosses, can’t POSSIBLY be conflicted?
Pull the other one it plays jungle bells.
The reason they are asking for retrospective waivers of this rule is they are afraid the truth will come out and want immunity from prosecution.
The double standards and unfair playing fields continue unabated at every level.
If we can’t exempt SMSF’s from aggregated accounting for the $3m rule which picks up unrealised capital gains on the basis of “we want the same rule for all funds” according to some nonce in Treasury then surely the same “rule” applies here does it not?
I should give up ever expecting a fair and balanced regulatory environment when the government of the day is joined at the hip with the union movement.
I agree… that line about potential mischief is a joke!!!
I’m interested to see how the NALI/NALE legislation plays out for Industry funds, because I think it will have a big impact.
“We’re Different”, says Big Super / Industry Super Funds.
Of course Industry Super are different, they DON’T want to be held accountable for any rules or conflicted money flows.
ISA are not for profit funds.
Because ALL the profits are syphoned out the back door to the Union Bosses who own all the related Admin and Support ISA businesses.
Profits for Union Bosses Super Funds is a more correct title for these funds.
And what will APRA and ASIC do = NOTHING
Regulatory approved conflicts of money shifting.