SMSF Administration

What is SMSF administration?

Managing a self-managed super fund requires a certain amount of administration each year and at key moments in the fund’s operation, such as setting up, making benefit payments, and winding up. 

Administration could be handled by an experienced trustee or the SMSF can hire outside experts, in addition to the external professionals required by law. Annual obligations include:

• Asset valuations. A yearly appraisal of the fund’s investment portfolio. Some assets, such as shareholdings are easy to value, whereas others such as real estate and collectibles would require expert assessors.
• Preparing accounts and statements. These services are often provided by the fund’s accountant and are required by the ATO and the auditor.
• Appointing an auditor. Every SMSF must be audited annually, by an independent, registered, external auditor. They check to make sure that the fund’s investments are being managed and decisions made in accordance with the objectives of the trust deed and with the SMSF laws.
• Annual return. The return is used by the fund to report all its expenses, income, and benefit payments, and by the ATO to calculate tax. It must be prepared and lodged with the ATO each year, much like a personal tax return.
• Pay tax. Once assessed, the administrators must ensure that the right amount of tax is paid, and by the due date.
• Pay the SMSF levy. The SMSF levy is a fee that all SMSFs are required to pay to the ATO on top of their tax obligations. It is a set, standard fee.

Extra admin if members are retired

Initial tasks

• Receiving the request: the trustees must receive a written request from the member, stating that they wish to receive a pension before they can move the SMSF to a pension phase
• Checking member validity: pensions can only be paid out when the member has met all conditions of release, such as reaching their required preservation age
• Minuting decision: the move to the pension phase must be recorded in the minutes of the relevant trustee meeting, and the ATO may wish to see that minuted record
• Value the assets: all holdings of the SMSF must be independently valued when a fund moves to a pension phase
• Appointing an actuary: if there is more than one member of the SMSF, then an actuary’s certificate may be required to help with tax calculations.

Ongoing tasks

• Making payments: there are minimum annual payments that must be made to the member each year (even if the member actually asks for less)
• Managing assets and cash flow: since assets held by the SMSF will still be owned and hopefully bringing in an income, those assets and cashflow must continue to be maintained, and trustees must keep an eye on ensuring there will be enough in the bank account to meet the pension payments
• Providing payment summaries: annual payment summaries – detailing all payments and tax withheld – must be provided to members and the ATO each year.

References
SMSF reporting and admin rules - ATO