SMSF annual admin checklist

The ATO requires you to review your investment strategy at least once a year and we think it’s a good idea to give it a once-over at least twice a year. You need to check things like whether your objectives are still current; whether all members are still happy with asset allocations – particularly relevant given recent market volatility and interest rate rises; and if you’re considering other types of investments such as property, why you think they will help retirement outcomes of members.

2. Hold regular trustee meetings and keep trustee minutes

If your fund has more than one member you need to hold trustee meetings around each major decision you make for your fund at least once a year when doing the fund’s accounts. You need to minute all investment decisions including why a particular investment was chosen and whether all trustees agreed with the decision.

Even single-member funds need to have regular meetings, possibly with non-member trustees or directors of trustee companies present depending on your trust deed.

You don’t have to talk to yourself in these single person meetings but you do need to keep a minute around each major decision you make for the fund and keep them for at least ten years.

3. Keep all documents for the required timeframe

The Australian Taxation Office (ATO) is quite specific around keeping documents for at least five years, and in many cases ten years, depending on the type of document (see below). If at any point your fund is audited, you are going to want to have the relevant documents to back up your decisions and choices.

You need to keep the following records for a minimum of five years:

• Accurate and accessible accounting records that explain the transactions and financial position of your SMSF
• An annual operating statement and an annual statement of your SMSF’s financial position
• Documentation showing decisions made about what benefit payment type was paid and the account from which the payment was made
• Copies of all SMSF annual returns lodged
• Copies of transfer balance account reports lodged
• Copies of any other statements you are required to lodge with us or provide to other super funds.

You need to keep the following records for a minimum of ten years:

• Minutes of trustee meetings and decisions (if matters affecting your fund were discussed, for example you reviewed the fund’s investment strategy)
• Records of all changes of trustees
• Trustee declarations recognising the obligations and responsibilities for any trustee, or director of a corporate trustee, appointed after 30 June 2007
• Members’ written consent to be appointed as trustees
• Copies of all reports given to members
• Documented decisions about storage of collectables and personal use assets.

4. Do the accounts and prepare annual return

You need to do your fund’s accounts and lodge your SMSF’s annual return each year. You may use an accountant for this but ultimately, as trustee, it will be your responsibility if anything is incorrect, so examine documents prepared for your fund carefully. For your annual returns, you will need your assets valued as at 30 June each year.

For listed assets, such as equities, this will be reasonably easy but for other assets, such as property (if you feel the value has changed materially in the last 12 months), you may need to get an independent valuation. You also need to pay the annual supervisory levy when you lodge your annual return.

5. Appoint an auditor

You need to appoint an independent auditor at least 45 days before your fund’s annual return must be lodged with the ATO. You also need to take on board any suggestions the auditor makes about your fund.

The auditor will put together a report and is required to return that to you within 28 days of receiving all necessary documentation to audit your fund. Auditors are also required to report any breaches to the ATO.

6. Get an actuarial certificate if required

If your fund has members in both pension and accumulation phase you may need an actuarial certificate as part of your annual accounts.

If your actuary is using the proportionate method to calculate the fund’s exempt current pension income, you will need a certificate annually.

7. Make transfer balance reports for members if necessary

A relatively new requirement for SMSF trustees is to make transfer balance reports whenever a transfer balance event occurs, if there are members in retirement phase. This is because there is now a limit on the amount supporting a pension, given that pension income is tax free.

The kind of events the ATO wants reported are basically anything that could impact a retired member’s transfer balance account.

Since 1 July 2023 all funds need to report within 28 days of the end of the quarter in which the event occurred.

8. Make annual minimum pension payments for members in retirement phase

It’s also important you make the minimum required pension payment each year if you have members in retirement phase. The percentage will depend on your age, as set out in the ATO’s table below. There is no requirement as to when or how often you make payments, just that they must be made by the end of the financial year.

Source: SIS Act

The bottom line

Ultimately there are significant penalties for SMSF trustees if you fail to comply with all your administration requirements, so we hope this checklist serves as a useful tool to make sure you stay on top of the law