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More people are looking at getting SMSFs to secure their retirement. But what is SMSF? Moreover, what is SMSF compliance?
How do you keep your SMSF compliant? We’ve narrowed down some points that you need to know about SMSF and how DBA can help with your fund’s compliance.
What is SMSF?
The Self-Managed Super Fund (SMSF) is a superannuation trust structure, or a way to save up for retirement in Australia. SMSFs are regulated by the Australian Taxation Office (ATO). Moreover, you have to understand the various administrative and compliance requirements to keep your SMSF compliant.
An SMSF is a legal tax structure. In fact, it even has its own Tax File Number (TFN), Australian Business Number (ABN) and transactional bank account.
SMSF provides its members with financial benefits upon retirement, which extends to their dependants upon death. You can receive contributions and rollovers, make investments and pay out lump sums and pensions through your SMSF.
Moreover, unique to other super funds, SMSF members are also the trustees of their fund. Hence, you are responsible not only for how the fund should be run but also for ensuring it is compliant with super and tax laws.
SMSFs are also called “do-it-yourself super,” because trustees have full control over how the fund should be managed.
There are two types of trustee structures for SMSF:
- Individual trustees – have a minimum requirement of two trustees and a maximum of four, and each member must be a trustee. Single-member funds must have two trustees, with the fund member as one of the trustees; and
- Corporate Trustees – a company acts as the trustee for the fund, with the fund member(s) as the director. The minimum requirement is one director and maximum is four—except for single-member funds where the maximum is two directors only. Each member of the fund must also be made a director.
What must an SMSF trustee do?
SMSFs are flexible funds which trustees can invest in various assets, such as property, private company, and international assets. As a trustee. you are responsible for all the investment decisions made with the fund even if another member makes the decision. In addition, you can customise the fund’s investments to suit your requirements before and after retirement.
Trustees also have the option to engage a professional to help run the fund. However, you are still the decision maker of where the fund should be invested in. Moreover, you must make sure to keep your SMSF compliant with superannuation and tax laws.
Your SMSF must be audited, regardless of whether you made contributions or payments, or not. All SMSFs also need to lodge an SMSF annual return to report income tax, super regulatory information and member contributions. The payment for the supervisory levy is also included in your SMSF annual return.
Hence, trustees are required to appoint an approved SMSF Auditor to audit their fund. In addition, they must appoint an SMSF Auditor at least 45 days before lodgment of the SMSF annual return.
Trustees are responsible for ensuring that the compliance requirements for their SMSFs are met—for example, organising an independent audit.
What does an SMSF Auditor?
Only a registered SMSF Auditor can conduct an annual audit of an SMSF. The SMSF Auditor will review your fund’s operation and complete a financial and compliance audit. Moreover, the SMSF Auditor must complete the audit before the SMSF annual return can be lodged with the ATO.
The Superannuation Industry (Supervision) Act 1993 (SISA), and the Superannuation Industry (Supervision) Regulations Act 1994 (SISR) governs SMSFs. Therefore, the SMSF Auditor must also ensure that the fund is compliant with these laws and all financial reports conform to accounting policies.
In addition, the SMSF Auditor must:
- examine your fund’s financial statement,
- provide an audit report,
- advise you of any breaches to the rules, and
- report contraventions to the ATO.
How to keep your SMSF compliant
DBA offers a robust SMSF Administration service to help trustees, accountants and financial planners with managing SMSFs. Our team is composed of highly trained and experienced SMSF accountants and auditors. We will work with you to ensure your retirement fund is running properly and remains compliant with super and tax laws.
Our team is equipped with the technical skills necessary to run most SMSF software available. We can prepare all the documentation, reports and compliance requirements to help you meet your trustee obligations. Moreover, we will ensure all the documents required for the SMSF audit are complete and up to date, for a seamless process.
Our ASIC-approved SMSF auditors can also provide you with general audit advice to help you understand your trustee responsibilities. We also offer audit support services to SMSF Auditors and audit firms. In addition, our most experienced ASIC-approved auditors can provide general SMSF audit technical support at no extra charge.
So, whether you are looking for someone to keep your SMSF compliant, or help you manage your clients’ fund properly, you can trust our SMSF Team to help you. What are you waiting for? Contact us and start receiving the DBA Advantage.
Maann Sagun, MDC, DMP
Maann is a Communication Specialist and educator—masking as the Senior Content Writer of DBA. She is also a Digital Marketing Professional and specializes in SEO Audits. Maann has taken both her master’s degree in Development Communication, and bachelor’s degree in Mass Communication from the University of the Philippines.
Maann Sagun, MDC, DMP
Maann is a Communication Specialist and educator—masking as the Senior Content Writer of DBA. She is also a Digital Marketing Professional and specializes in SEO Audits. Maann has taken both her master’s degree in Development Communication, and bachelor’s degree in Mass Communication from the University of the Philippines.
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