After months of COVID19 restrictions, working from home, chasing pets & children we are now gradually moving back into our offices. From 1st December staff will be in attendance. We still recommend contacting our staff by email. Face to face meetings are available by appointment. See below some items that may be of interest.
Superannuation accounts will be ‘stapled’ to an employee when they change jobs
The Government has announced that, from 1 July 2021, they will implement a proposal to ‘staple’ an existing superannuation account to an individual as they move between jobs.
Underperforming funds will be prohibited from accepting new members
The Government has announced they will conduct benchmarking tests on superannuation funds and prohibit funds that underperform over two consecutive years from accepting new members until they cease underperforming. The measure will take effect from 1 July 2021.
Members will have access to a new interactive tool to compare superannuation funds
The Government has announced that individuals will have access to a new interactive online YourSuper comparison tool to compare superannuation funds from 1 July 2021. It is expected that employees who change jobs will also be able to select a superannuation fund from within the YourSuper portal.
OTHER SMSF MATTERS
Small fund membership increased from four to six members
The Government restated an intention to increase the maximum number of fund members that can participate in a self-managed superannuation fund (SMSF) and a small APRA fund to six members (up from four). This measure was originally announced in the 2018-19 Budget and amending legislation is currently before the Senate with a start date from Royal Assent.
An increase in permitted member numbers to six that should provide additional opportunities for families to pool wealth in a common superfund structure for investment and access investment opportunities that would not otherwise be available.
From an audit perspective, an increase in fund members may require an update to the fund’s existing trust deed. A number of deeds specifically limited the number of members to four.
There were no changes or extensions to minimum withdrawal rates and temporary access to superannuation than those previously announced. Therefore:
- The application for early release continues to end on 31 December 2020. For audit purposes we will require documentation from the ATO confirming eligibility to withdraw monies. This of course should be dated prior to the benefit being paid to the member.
- The superannuation minimum drawdown requirements for account-based pensions and similar products is reduced by 50 per cent and continues for the 2019-20 and2020-21 income years.
The ATO has published some guidance in relation to the application of the reduced pension withdrawals. Essentially:
- Pension payments made up to 24 March 2020 (the date of the Government’s announcement) in excess of the new reduced minimum annual payment will be treated as pension payments in 2019/20 and cannot be treated as lump sums.
- Trustees should have appropriate documentation to support the payment of lump sums or partial commutations