SMSF reporting and record-keeping requirements

Let’s look at each of these responsibilities in more detail.

Appointing an SMSF auditor

You must appoint an approved auditor at least 45 days before your SMSF annual return is due. This auditor must be independent; that is, they must not have any financial interest in your SMSF, nor have any personal or business relationships with fund members/trustees.

Approved auditors are registered with the Australian Securities and Investments Commission (ASIC). Your SMSF auditor is responsible for analysing your fund’s financial statements and assessing its compliance with super law. They must report any non-compliance issues to all fund trustees and the ATO.

Any SMSF records that your auditor requests must be provided within 14 days. This process will be much easier if you have systems in place to maintain and store your records.

Valuing your fund’s assets

Your SMSF’s assets need to be valued at market value when its accounts, member benefit statements and annual tax returns are prepared. You will also need a valuation whenever a member starts a pension payment arrangement.

Paying the ATO SMSF supervisory levy

All SMSFs must pay an annual SMSF supervisory levy to the ATO. The annual levy is currently $259. It must be paid in advance, meaning that you pay double your annual SMSF levy in the first year of your fund’s operation.

Event-based reporting

Event-based reporting is an ATO framework introduced in July 2018 to help administer the transfer balance cap (TBC).

The transfer balance cap is the total amount of a person’s super that can be transferred to the retirement phase. The current cap is $1.9 million. This figure will increase over time in increments of $100,000, in line with movements in the consumer price index (CPI).

SMSFs need to start event-based reporting as soon as one of their members begins a retirement phase income stream. This is done by submitting a transfer balance account report (TBAR) to the ATO providing details of the member’s retirement phase income stream. Your SMSF must then report any events that subsequently affect any member’s transfer balance.

Since 1 July 2023, this event-based reporting must occur within 28 days of the end of the quarter in which the event occurs, regardless of the size of the member’s balance. All unreported events that occurred before 30 September 2023 must be reported by 28 October 2023.

Reporting fund member or trustee changes

Any changes to SMSF fund members/trustees (or their contact details) must be reported to the ATO within 28 days.

These details can be updated online at the government’s Australian Business Register, by phone (13 10 20) or by lodging a Change of details for superannuation form that can be downloaded from the ATO website.

Maintaining records

Maintaining SMSF records helps trustees and professionals they hire to help administer the fund to comply with their legal obligations.

These obligations include lodging the fund’s tax return to the ATO each year and paying any tax by the due date, as well as ensuring that the fund’s annual independent audit is completed.

Needless to say, a good record-keeping system can save time and money spent on SMSF administration.

One sensible approach is to separate general SMSF records from those that relate to specific financial years.

General SMSF records

General SMSF records include:

• The fund’s trust deed. An SMSF’s trust deed is a legal document that sets out the rules for establishing and managing the fund, including its goals and member eligibility.
• Fund member/trustee information. For example, their full name, address, date of birth and contact details, as well as their death benefit nominations (so future fund payments can be made when they die). This information should be kept up to date.
• Signed trustee declarations. All SMSF trustees must consent to the role in writing and sign a trustee declaration indicating that they understand all their legal obligations.
• The fund’s investment strategy. It’s a legal requirement for SMSFs to have a documented investment strategy. This investment strategy must satisfy the sole purpose test and be used to guide trustee decision-making. It should be reviewed regularly so it remains appropriate for the fund’s goals.
• Registration documents and associated information. For example, your ASIC registration if your SMSF has a corporate trustee structure, the Australian Business Number (ABN) and tax file number of your fund, as well as its electronic service address. Your fund’s electronic service address allows your fund members’ employers to transfer super contributions electronically using a system called SuperStream. All employers must use SuperStream to make super contributions for their employees.
• Minutes of trustee meetings. These minutes should provide an accurate record of trustee discussions and decisions for future reference. Minutes should include important information, such as why particular investments were chosen and whether all trustees agreed with the decision.

Financial year SMSF records

Financial year SMSF records that should be kept include any information that will help prepare your fund’s tax returns, its accounts and member benefit statements, as well as its annual audit.

For example, information about:

• The fund’s income. This includes both member contributions and investment earnings.
• The fund’s asset valuations. This helps to ensure that up-to-date valuations are included in the fund’s financial statements.
• The fund’s deductible expenses. Deductible expenses can include audit fees, investment-related expenses or those involved in the preparation of the fund’s tax returns. Appropriate records should be kept accordingly, including how the expenses have been apportioned against member balances (for example equally, or proportionally based on each member’s total fund balance).
• Member benefit payments. This includes any lump sum or pension payments to members who have reached their preservation age and met a condition of release (such as retirement or beginning a transition-to-retirement income stream).

If you’re making pension payments to fund members, minimum annual amounts are required. These amounts depend on the fund member’s age, as indicated in the table below.

Age of beneficiary	Percentage factor
Under 65	4%
65 to 74	5%
75 to 79	6%
80 to 84	7%
85 to 89	9%
90 to 94	11%
95 or more	14%

Source: SIS Act

In addition, if you’re making member pension payments, your fund may need an actuarial certificate to claim tax-exempt pension income on your fund’s annual tax return.

An actuarial certificate is generally required if the pension assets of the fund are not segregated from its accumulation assets. However, this certificate is not usually required if all members of the fund are drawing pensions and no longer making contributions to the fund.

Record-keeping timeframes

As there are legal requirements for how long SMSF records need to be kept, an efficient storage system is important. Timeframes vary depending on the type of record.

For example, the following SMSF records need to be kept for five years:

• Accounting records that explain the fund’s annual transactions and financial position
• Copies of all annual returns and any transfer balance reports lodged with the ATO.

The following SMSF records must be kept for ten years:

• Minutes of trustee meetings
• Records of any changes to fund trustees
• Trustee declarations and consent
• Copies of all member reports.

The bottom line

There are a host of administrative, reporting and record-keeping obligations to ensure SMSFs comply with superannuation and taxation legislation. Fund trustees are ultimately responsible and can face substantial ATO penalties for non-compliance. Super funds (including SMSFs) must be compliant to receive tax concessions under Australian super law.

The information contained in this article is general in nature. It’s best to seek independent professional advice to determine all your legal obligations for your specific SMSF circumstances.