This webinar presentation discusses the Stronger Super reforms and their impact on SMSFs. Key points included greater enforcement by the ATO, increased competency requirements for SMSF advisors, and changes to the SMSF audit process. The mandatory education requirement and ability to pursue gearing strategies were seen as positive outcomes. Implementation of the reforms will occur over the next two years. The presenter, Aaron Dunn, then discussed upcoming SMSF education offerings through The SMSF Academy.

1. Stronger Super: The impact for SMSFs Special Webinar Event 21 December 2010 Presented by: Aaron Dunn Director, The SMSF Academy www.thesmsfacademy.com.au

3. You can type questions to the presenters from your screen

4. PowerPoint presentation and the recording will be made available to participants after the session

6. CPA and SMSF Specialist AdvisorTM (SSA)

7. Managing Director of The SMSF Academy

8. Established to provide education and training to trustees and advisors

9. Previous role as Head of SMSF Solutions, Snowball Group Limited

10. Personally invited by Jeremy Cooper to meet and discuss Phase Three of the Super System Review

11. Part of the ATO Auditor Working Group for Super Simplification

13. A good result for SMSF Trustees… Why? No mandatory education to operate a SMSF Unless you breach your fund’s compliance obligations Greater competency required of those advising to trustees Still provides absolute investment choice Including Artwork, collectibles, IHAs Ability to continue to pursue gearing strategies To be reviewed in 2 years time BUT AT WHAT COST?

14. But the message is loud and clear… Greater enforcement to uphold integrity of the superannuation system Sliding scale of administrative penalties Less serious cases of non-compliance To be paid by the Trustees (not the Fund) Would need a condition of release to be met / illegal early access Mandatory education where breaches occur How severe does the breach need to be? To be paid by the Trustees (not the Fund) ATO to have greater powers to enforce action to rectify To be paid for by an increase in the Supervisory levy effective from 2010/11 financial year

15. More expected from the SMSF Service Provider “bookends” SMSF - Advice SMSF Audit Financial Advisers (8.6) Increase in competency required to advise on SMSFs ASIC to develop a SMSF specialist knowledge component of RG146 To consult with FoFA expert advisory panel on its implementation FoFA & the Accountant’s Exemption (8.7) Who will be able to provide advice about establishing a SMSF? Currently considering alternatives including a restricted licensing framework as part of FoFA process

16. SMSF Service Provider “bookends” (cont.) SMSF Audit SMSF - Advice Approved Auditors (8.8) ASIC as registered body Determine qualifications, competencies and apply penalty regime (incl. deregistration) Link to minimum ongoing competency and knowledge requirements ATO to police approved auditor standards To share information with ASIC to both carry out roles effectively For example:Expect “Audit the Auditor” program to continue with incompetent auditors referred to ASIC for disqualification (along with professional body) ASIC to develop approved auditor independence standards (8.9) Review of existing standards and industry consultation E.g. APESB existing requirements for SMSF auditing

17. What was good, bad and indifferent in the government recommendations?

18. Key Recommendations – The “good” stuff Borrowing certainty for next 2 years (8.10) Will assess excessive use and risk across the industry In-house Asset abolition not supported (8.12) Not perceived as detrimental to the industry Prohibition of collectibles and personal use assets not supported (8.14) As expected – Gillard government promise during election campaign New stringent requirements to be introduced from 1 July 2011 All assets to be valued to net market value ATO with industry to develop valuation guidelines Reduce the administration burden (8.19) Removal of the ‘two hat’ syndrome Focus on improving system’s integrity E.g. Fund establishment process & verification (8.20, 8.21) including rollovers from APRA-regulated funds (8.23), criminal & civil sanctions for illegal early access promoters (8.24, 8.25), AML/CTF for rollovers (8.26), etc.

19. Key Recommendations The “Not sure?” stuff Trust deeds There will still be a need to tailor super fund trust deeds!! For example, how do you build in death benefit rules, such as the SMSF Will? How is voting determined between the members? Impact of SIS operating standard to separate fund assets This will become a section of the compliance audit May present issues using a trading company as trustee Special Purpose Trustee Company by far the superior choice “Not-so-good” stuff In-specie share transfers to become prohibited (s.66) Where secondary market exists, you must buy & sell Property will require an independent valuation by a qualified valuer ATO will not be able to give binding rulings View that rulings could become contrary to retirement income policy No requirement to provide key fund information on an annual basis Deemed to be an unnecessary administrative burden and increased in cost Are trustees getting enough info to appropriately measure the benefits of running their own SMSF?

20. Implementation timeframe

21. SMSF Trustee Academy SMSF Advisor Academy Education (free) Full access to the Trustee Academy Monthly web-based SMSF training (update) Special topics webinars Step-by-step professional guides White-label content to generate revenue for your business Advisor document creator Advanced training days Trustee Webinars Step-by-step guides Investment markets from panel of leading experts Trustee document creator Important dates Discounts to Trustee days (face-to-face) ‘thedunnthing’ blog Education videos Educational content SMSF calculators Ability to participate in some webinars New & events http://www.youtube.com/thesmsfacademy Visit the SMSF Academy TV to watch our new videos SMSF Technical/Strategy Library Advisor - $770 or $2,200 (inc. GST) Membership - $330 (inc. GST)

22. The SMSF Academy Official launch – mid/late Feb 2011 First monthly SMSF eCPD update – late Feb 2011 Visit The SMSF Academy YouTube channel New videos just launched including: Thinking about SMSFs Setting up a SMSF Trustee Roles & Responsibilities Money when you’re gone – death benefits More to come in January 2011 contributions, investing, benefit payments, borrowing Register on website to receive future communication regarding launch

23. Thank you Aaron Dunn B.Bus (Acc) CPA SSA Managing Director, The SMSF Academy Tel: 03 9351 0183 Mob: 0488 055 836 Email: aarond@thesmsfacademy.com.au Web: www.thesmsfacademy.com.au Blog: http://thedunnthing.com