Q: With the superannuation rules changes coming into effect from 1 July 2017, what concerns you the most within the Self Managed Super Fund sector?
A: With many of the changes announced in the 2016 Federal Budget now passed by Parliament, there is an amount of certainty that you can have when approaching your SMSF planning including how contributions caps and pension limits might work.
Many trustees don’t understand or know their obligations, and it is at the time of the annual accounts and audit to be completed, that the issues are uncovered. Since the Government has introduced a raft of changes from 1 July 2017, it is concerning that trustee will not keep pace with the changes and couple this with a general lack of understanding of the super rules and regulations for SMSFs, it could cause problems.
The super changes from 1 July 2017 could require trustees to undertake a restructure to their fund in order to comply with the $1.6 million transfer balance pension cap for taxation reasons before 1 July 2017.
As a professional services firm and a SMSF specialist adviser, we take trustee education seriously. Before a client commences their fund, we recommend they complete a trustee education course approved by the Australian Tax Office (click here). This free course is offered by many different industry organisations and it will allow prospective trustees to grasp the basics which are often overlooked.
Being proactive about your ongoing education and understanding your role as a trustee is important. You can also subscribe to different websites such as the Trustee Knowledge Centre Login offered by the SMSF Associations (click here). Our clients who have a SMSF in place receive this as a complimentary membership along with the ongoing compliance support from our firm.
A large amount of our time is spent educating clients about their role and responsibilities. Spending time on compliance matters and engaging with new clients to help them address matters that have been reported to the Australian Taxation Office by the auditor of their fund is part of our specialist SMSF service offering.
Even though the role of a trustee becomes easier as time progresses, it is essential to realise the education when the fund is established and over the lifetime of the fund will require a level of persistence and commitment. Any change in the rules and regulations governing superannuation will require you to understand how this will impact your fund.
Trustees should seek advice due to the changes coming into effect from 1 July 2017 to ensure the compliance of the fund. They should also take advantage of the limited window of opportunity to make contributions, restructure pensions or undertake lump sum withdrawal before 30 June 2017.
Trustees should also consider updating the Trust Deed of the fund to ensure compliance with the new changes when undertaking their planning. In a recent Blog (click here), we investigated the reasons to update a Trust Deed and risks involved when operating a SMSF on an outdated Trust Deed.
So what is next?
The upcoming changes are the biggest to the system in the past 10 years. All trustees need to assess the impact of the changes and identify any required actions or last minute opportunities.
The need to seek advice exists and working with a team of professionals (such as an accountant, auditor, solicitor and financial adviser) to assist you to operate a compliant and successful fund is essential.
Article written by Damian Hearn, WealthPartners Specialist Adviser
 Note: The ability for a member to make contributions, restructure pensions or undertake lump sum withdrawal will not be prohibited and will be subject to the rules in place from 1 July 2017. The rule changes may require action prior to 30 June 2017 before the rule changes come into effect.