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Employer SuperStream checklist

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:

Obligations
You must make contributions to a super fund through a SuperStream solution unless you are eligible for the following exemptions:

Step-by-step guide
Once you have decided that SuperStream is right for you, the following steps will help you stay compliant:

Posted on 7 December '18, under Super. No Comments.

ATO warns of illegal early super release

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 work
The promoters of these schemes:

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 return the super to the fund later. If you are an SMSF trustee, you may be fined up to $420,000 and liable for jail terms of up to five years. Civil and criminal penalties apply to promoters.

Posted on 29 November '18, under Super. No Comments.

Paying super to contractors

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 requirements
Super contributions must be made for these individuals if you pay them:

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 pay
The 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.

Posted on 26 November '18, under Super. No Comments.

SMSF trustee investment strategy checklist

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.

Posted on 20 November '18, under Super. No Comments.

Trustee reporting obligations checklist

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:

Posted on 8 November '18, under Super. No Comments.

A checklist for setting up your SMSF

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:.

Posted on 30 October '18, under Super. No Comments.

ATO update: Check for $17.5 billion in lost super

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.

Posted on 26 October '18, under Super. No Comments.

Event-based reporting framework for SMSFs

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 report
Your SMSF must report events affecting a member’s transfer balance including:

Exclusions

Posted on 19 October '18, under Super. No Comments.

Managing risk in your SMSF

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:

Diversification
Diversification 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.

Liquidity
If 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.

Posted on 12 October '18, under Super. No Comments.

Choosing the right super risk profile

Choosing the right super risk profile at the right time can drastically increase your retirement savings.

The following considerations will help you invest wisely when it comes to building your retirement nest egg.

Types of investment options
Your super fund should offer a range of investment options to consider. Here is what to know about each kind of option:

Picking the right option
The investment option right for you depends on your retirement goals, your financial circumstances and your attitude towards risk. Your timeframe for investment should be substantial if you are looking at high-risk options as you have a considerable opportunity to recover from any losses. As your income stabilises and your retirement comes closer consider shifting to a low-risk alternative to secure what you have built up. You may also want to look to your assets like your business or various properties that may also help you fund your retirement when assessing if you can afford to take a risk.

Posted on 5 October '18, under Super. No Comments.

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