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Authority for super complaints introduced

Posted on December 14, 2018 by admin

The new Australian Financial Complaints Authority (AFCA) will make it easier for individuals and small businesses to make complaints about their superannuation financial firms. The Coalition government has responded to criticisms of previous dispute resolution bodies by creating a new financial disputes framework. AFCA has been described as a “one-stop shop” that will improve outcomes for consumers and increase the efficiency of the dispute resolution process. AFCA’s jurisdictionAFCA has been given authority over a range of complaint areas including: Superannuation annuities Corporate, industry and retail super funds SMSFs (handled under investments and advice jurisdiction) Approved deposit funds Small funds Retirement savings accounts Trustees, insurers and decision makers of relevant super bodies What you can make complaints aboutYour super complaint to AFCA must adhere to its governing rules. AFCA has specific time limits for complaints but no monetary limits. You can make complaints about: The advice you were given about a superannuation product Fees or costs that were incorrectly charged or calculated Information you weren’t given about the product including fees or costs Errors in the information provided to you; for example, if your benefit statements are incorrect Decisions your super provider has made Payment of a death benefit Giving instructions […]

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Employer SuperStream checklist

Posted on December 7, 2018 by admin

Employers must make superannuation contributions on behalf of their employees. SuperStream is the ATO’s electronic and standardised solution that streamlines the super payment process. Using SuperStream for employers means: You can use one online channel to pay multiple funds Less room for error during data entry, due to fewer steps Transactions reach funds faster ObligationsYou must make contributions to a super fund through a SuperStream solution unless you are eligible for the following exemptions: Personal contributions if you are self-employed or a sole trader and make after-tax contributions to a super fund for yourself Contributions to your SMSF where you’re a related party employer. For example, if you are an employee of your family business and your super guarantee contributions go to your SMSF. Step-by-step guideOnce you have decided that SuperStream is right for you, the following steps will help you stay compliant: Choose an option: you can choose from a payroll system, your super fund’s online system, a super clearing house and a messaging portal Collect information and update your records: refer to the ATO for an exhaustive list of the information you will need from your employees Pay the SuperStream way: pay as soon as possible so you […]

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ATO warns of illegal early super release

Posted on November 29, 2018 by admin

The ATO has issued a warning to the public regarding illegal early release of super schemes, which are subject to severe penalties. There are strict rules around when you can access your super so your current decisions do not jeopardise your quality of life in retirement. The ATO has reminded the public you may only access your super early if you have experienced severe financial hardship or you have reached the preservation age and have stopped working. How these schemes workThe promoters of these schemes: Encourage you to transfer or rollover your super from your existing super fund to an SMSF to access your super before you are legally entitled to Target people under financial pressure or those who do not understand super laws Claim you can access your super and put the money towards anything you want which is not true Charge high fees and commissions, presenting the risk of losing some or all of your super to them May request your identification documents which can result in identity theft Penalties:Penalties apply to promoters and individuals who illegally access their super early. If you illegally obtain your super early, it is included in your assessable income even if you […]

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Paying super to contractors

Posted on November 26, 2018 by admin

The ATO classifies contractors paid for their labour as employees for superannuation guarantee purposes. This is the case even if the contractor quotes an Australian Business Number (ABN). Eligibility requirementsSuper contributions must be made for these individuals if you pay them: Under a verbal or written contract that is wholly or principally for their labour- that is, more than half the dollar value of the contract is for their labour For their personal labour and skills- which may include physical labour, mental effort or artistic effort and not to achieve a result To perform the contract work personally – they must not delegate. You do not pay super to a person when you make a contract with someone other than the person who will actually provide the labour, like a company, trust or partnership. How much to payThe minimum super amount you have to pay is 9.5 per cent of each worker’s ordinary time earnings. For contractors, employees calculate the minimum super amount on the labour component of the contract. The ATO will accept their market values of the labour if the values of the various parts of the contract are not detailed in the contract.

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SMSF trustee investment strategy checklist

Posted on November 20, 2018 by admin

SMSF trustees have the freedom to invest as they choose to grow their retirement savings, which is why it is vital that they check in on their investment strategy regularly. Maximising your retirement nest egg depends on how well your investment strategy functions at different phases in your working life. This is why your investment strategy should shift according to your changing financial circumstances. A new job, fluctuating markets, changes in tax laws or your retirement drawing closer may mean it’s time to switch up your investments. Here is a checklist to get you started. Map your risk profiles Consider circumstances including risk, diversity, liquidity and member’s circumstances Take out insurance for members Confirm all fund investments comply with super laws and are allowed under a trust deed Plan to regularly review your investment strategy Document any decision about investment strategy

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Trustee reporting obligations checklist

Posted on November 8, 2018 by admin

Trustees must comply with reporting obligations to avoid penalties from the ATO. The following trustee reporting checklist to make sure you are stress-free at tax-time. Trustees must: Value the funds’ assets at their market value at 30 June Pay any minimum annual income stream payments required under super laws Get an actuarial certificate if required Prepare the fund’s end of year financial accounts and statements Appoint and approve a SMSF auditor not more than 45 days before the SMSF annual return is due Lodge your SMSF annual return by the due date Lodge your transfer balance account reports if required Review the fund’s investment strategy and document the review Maintain all the fund’s records as required under super law

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A checklist for setting up your SMSF

Posted on October 30, 2018 by admin

Setting up an SMSF can be complex, which is why a checklist is useful to streamline your process. Before you set up your SMSF, first determine if having an SMSF is a commercially viable option. Once a decision is reached and you are about to start your SMSF, here are the basic steps to get things started:. Determine which members will be in your fund? Decide if you will you seek professional help to assist your set up? Decide whether the fund should have individual trustees or a corporate trustee Establish a suitable trust and trust deed Register your fund with the ATO Set up a bank account Prepare an exit strategy Get an electronic service address so the fund can receive contributions from employers

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ATO update: Check for $17.5 billion in lost super

Posted on October 26, 2018 by admin

The ATO’s new data revealed that although the total amount of lost and unclaimed super reduced by $420 million in 2017-2018, there is still $17.5 billion left to be found. The ATO has prioritised reuniting people with their lost super spread across over 6.2 million accounts. In the past financial year, the ATO was successful in merging $3 billion into active super accounts across the country. Typically people lose contact with their super funds when they change jobs, move house or forget to update their details. Although some people may intentionally maintain multiple accounts, those who are unaware they have an inactive account may not realise that fees are possibly eroding their super. You should remain engaged with your super fund throughout all stages of your career so you can maximise your retirement nest egg. You can view your super account details, including lost or forgotten accounts, by linking your myGov account to ATO online services. If you are unsure whether consolidating your super is the best option your super fund can advise you on issues such as insurance that may be attached to your accounts.

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Event-based reporting framework for SMSFs

Posted on October 19, 2018 by admin

The event-based reporting (EBR) framework for self-managed super funds (SMSFs) commenced on 1 July 2018. The initiative allows for the administration of the Transfer balance cap (TBC). Under the EBR framework, you need to report to the ATO, when the first member of your SMSF begins a retirement phase income stream. The SMSF annual return is to be kept separate from the transfer balance account report. The TBAR enables the ATO to record and track an individual’s balance for their TBC and superannuation balance. The ATO does not provide ‘special circumstances’ discretion for contraventions of the TBC which is why SMSF trustees and members self-monitor to ensure that members do not exceed their TBC. Events to reportYour SMSF must report events affecting a member’s transfer balance including: Details of pre-existing income streams (including value and type) being received on 30 June 2017 that continued to be paid to them on or after 1 July 2017 or were in retirement phase on or after 1 July 2017 Details of new retirement phase and death benefit income streams including value and type (when a death benefit income stream is reversionary, the start date will be the date on which the member died) […]

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Managing risk in your SMSF

Posted on October 12, 2018 by admin

SMSFs provide the trustee autonomy and an increased opportunity to maximise your retirement savings. However, an investment strategy must be accompanied by a risk management plan should some of your investments come up short. Consider the following risk management strategies: DiversificationDiversification reduces risk by investing in many different assets including property, annuities and equities. By spreading your earnings across several investments you minimise the risks to your retirement nest egg that can occur if one investment suffers a loss or a disappointing return. Organise your target returns according to your asset class and establish the accepted variation range from this target. This allows you to track your investment portfolio and whether it is setting you on the right financial path. LiquidityIf you tie up your money in assets like property, then you may run short on cash. It is important that you have cash to cover the costs of running your SMSF and in the case of a member’s total and permanent disablement. If you’re also forced to sell an asset to get this cash the market conditions may not be ideal, and you could receive a disappointing return because you need cash in a rush.

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