An SMSF or self-managed superfund is a method of preparing for financial independence during retirement and is best described as a “DIY superfund” as compared to its other superannuation counterparts. It means the trustee who manages and does the superfund administration also the recipient of the payout upon retirement. You must be aware on this because this is somehow very important to know as you will be getting your financial status involved.
When choosing an SMSF auditor that can perform audits at arm’s length, as set out by the ATO, individuals and accountants want to consider organization’s that deliver the best expertise in combination with great customer service.
Before setting up your self-managed super fund, it is essential to know the important tasks and activities involved in the set-up process and ongoing management. Below are some important to-do items essential to an effective administration of self-managed superfunds, in no particular order:
- Over-all Compliance
First of all, SMSFs need to be compliant with a number of laws, rules and regulations set out by the taxation office and as mandated by the government. You can even visit their website for more available details and you can check valuable information with them about self-managed super funds.
- Maintenance of Relevant Records and Documentations
Keeping and updating records and the documentation reflecting the administration and management of your superfund is a mandatory. These records will be used by the taxation office in auditing your SMSFs to see that there is compliance in every step of the process. The taxation office requires the records that should be kept include the following:
- Meeting transcripts containing important investment decisions
• All SMSF transactions that took place
• Operating statements, statements on the fund’s financial position and other annual statements
• Declarations from trustees
• Copies of information provided to members (such as returns)
• Any tax-related documentation such as income tax and deduction documentation
- Appointment of an Accredited Auditor
The trustee is mandated to appoint an independent, approved auditor to audit the fund. A required report compiled by the auditor must be presented to the trustee. It should be given to the trustee on or before the fund is required to lodge its SMSF annual return. The main task of the SMSF auditor is to examine the funds’ financial statements and assess the fund’s compliance with the laws and regulations governing superannuation in general and SMSFs in particular. More details here: https://www.moneysmart.gov.au/superannuation-and-retirement/self-managed-super-fund-smsf
- Filing of Statements and Returns
SMSF administration also means filing the required returns and statements. For example, the trustee must lodge the annual return by the due date to:
- report income tax
• report super regulatory information
• report member contributions and pay the supervisory levy.
When benefits are rolled into other funds, an accurate rollover benefits statement must also be lodged.
Because SMSF administration is so complex and time consuming, it can be highly beneficial to work with an experienced accountant and SMSF auditing expert. It makes it much easier to manage the SMSF administration and ensure ongoing compliance of your self-managed super fund.