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Reporting Trap Flagged With Accumulation Members


Given that the commencement of a new pension is considered to be an event under the new reporting, SMSF firms will also need to monitor accumulation members who are of pension age, a software company has warned.

Speaking to SMSF Adviser, Class chief executive Kevin Bungard said one of the things that SMSF practices need to be aware of is that the first time someone commences a pension, that’s a reportable event.

“So what that means is that you may have members who are not currently reporting under the quarterly TBAR, but when they go to start their first pension, if they’re of an age where they could start a pension this year, you will need to know what their total super balance was at the beginning of the year,” explained Mr Bungard.

While Class analysis indicates that approximately 45 per cent of funds are currently in pension phase excluding TRISs, approximately 60 per cent of SMSFs have at least one member who is over 60 years or older, he said.

This means that around 60 per cent of funds are in a position where if a member ceased employment, they could actually start a pension, he explained.

Around 22 per cent of SMSFs have a member with a balance over $1 million, he said, and while they may not be the same member as the member aged 60 and over, they could still be caught by the reporting.

“You could have a situation where a member with less $1 million is starting a pension but the other member in the fund has a balance greater than $1 million in the accumulation phase, so the quarterly reporting requirements will still catch them,” he warned.

By Miranda Brownlee

SMSF Adviser

27 November 2017


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