CALL US: (07) 3367 0999 | EMAIL US:

Diversification requirements for SMSFs

The ATO has identified approximately 17,700 SMSFs where investment strategies may not meet the requirements under regulation 4.09 of the Superannuation Industry Supervision Act (SISA). Records show these SMSFs may hold 90% or more of funds in one asset, or a single asset class.

Diversification aims to maximise an individual’s return by investing in different asset classes that react differently to the same event. Although it does not guarantee avoiding a loss, diversification is an important component of reaching long-term financial goals while minimising risk. This can help to control a super fund’s risk, as the better performing asset classes will help offset the others that aren’t performing very well. Diversification also provides the super fund with the opportunity for long-term growth, as the portfolio is exposed to asset classes with strong growth potential.

SMSF trustees that don’t have the appropriate blend of different asset classes in their fund risk their portfolio experiencing increased and unnecessary volatility. Well-diversified SMSFs include all the major asset classes including cash, fixed interest, shares and property.

To help ensure an SMSF is properly diversified, consider the exposures the fund currently has to the major asset classes and assess how diversified the fund is. Trustees must then engage in the process of working out which asset classes the fund requires to be properly diversified.

Business
advice

taxation
planning

compliance
services

News

Super for different visas

September 18, 2019

Australian employers are required to pay super to their employees when they earn $450 a week or meet specific criteria based on age or industry. Employer requirements can get confusing however when dealing with international workers or sending employees overseas. Here are the requirements employers must follow when handling super payments to workers with different visas.

Temporary residents:
Temporary residents working in Australia may be eligible to receive super from their employer. Eligibility criteria are the same as it would be for a permanent Australian resident, you must be 18 years or older and have been paid $450 or more (before tax) in a month. Working holiday makers holding a 417 (Working Holiday), 462 (Work and Holiday) or an associated bridging visa can access the super paid as a departing Australia superannuation payment (DASP).

Employees working overseas:
For an Australian employee sent to work overseas, their employer must continue to pay super contributions in Australia for them. The other country may require the employer or employee to pay super there as well if Australia does not have a bilateral agreement with that country. To gain exemption from the super payment in the other country, the employer needs to show the authorities in the other country a certificate of coverage gained from the ATO.