SMSF: LRBAs unlikely to pose risk to super system

The Council of Financial Regulators has released its second report on Leverage and risk in the superannuation system .

Consistent with the 2019 report, the Council found that limited recourse borrowing arrangements (LRBAs) were used almost exclusively by SMSFs, are “unlikely to pose a material risk to the superannuation system or broader financial system”.

Nevertheless, the report found that LRBAs continue to be a significant risk to some individuals’ retirement savings. Accordingly, the Council recommends continued monitoring and reporting on an “as needed” basis to ensure appropriate oversight of these risks.