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Please enter the full name of your SMSF. Do not put "the" before the name of your Super Fund.
For example:
John Smith Superannuation Fund
Nicholson Family Superannuation Trust
Hutton-Grieve Super Fund
This hint is provided by Peter Bobbin (Argyle Lawyers).
So that the minutes of meeting can be formally prepared we commonly identify the place of the meeting to be the usual place of address of the SMSF. This is why we need a physical address, not a Post Office Box number.
The address could be your home or office or perhaps the office address of your accountant or adviser. Please identify what is practical for you.
This hint is provided by Peter Bobbin (Argyle Lawyers).
When someone joins a superannuation fund or starts a pension, the law requires that certain information should be provided by the Trustees of the Fund to the member. This kit provides all the necessary information in an easy to understand form.
This hint is provided by Peter Bobbin (Argyle Lawyers).
This pension kit allows for the establishment of any pension including either an Account-Based Pension (suitable for someone who has actually retired) or a Transition to Retirement Income Stream (for someone who is over Preservation Age but who has not yet retired and who is salary sacrificing into superannuation).
Note that this pension kit allows for the establishment of a Reversionary Beneficiary but it is recommended that this be done as part of an estate-planning exercise to ensure that the super fund, your wills, and any binding or non-binding nominations are co-ordinated and any arrangements take into account all aspects of your personal situation.
This hint is provided by Peter Bobbin (Argyle Lawyers).
Print out the documents generated by this kit and ask the member and the Trustees to sign where indicated. Provide a copy to the member, keep a copy with the fund records, and provide a copy to the fund administrator and the fund auditor for their records.
This hint is provided by Peter Bobbin (Argyle Lawyers).
Trustees are either individual persons (i.e. Humans) or a corporate entity (i.e. company).
If a super fund only has one member, it will often have a company as trustee (or a second human trustee). Similarly, if a fund has 4 members, it may have a company as trustee (for ease of holding investments). We need to know which sort of Trustee the super fund has so the correct type of minutes are created.
This hint is provided by Peter Bobbin (Argyle Lawyers).
If you have a company trustee, all of the members of the SMSF must be the directors of the company. The company cannot have any other non-member directors unless they are a personal legal representative of the member.
If your SMSF is a single member Fund and has a company trustee, either:
(1) the single member must be the sole director of the trustee company; or
(2) there must be a second director of the trustee company who is either related to the single member of the Fund or who is any other person other than an employer of the single member. The second director will not become a member of the Fund by virtue of the directorship.
Whether the trustee of the Fund is a natural person or a company trustee, the Fund will be administered in much the same way. The benefit of using a company trustee being that the superannuation assets will not be held in the personal names of the SMSF members. There are however costs for establishing and maintaining the company trustee that should be borne in mind.
Please consult your Accountant and Adviser about the costs and benefits of having a company trustee.
This hint is provided by Peter Bobbin (Argyle Lawyers).
Every Australian company has an ACN. It is a unique 9-digit number. If you are not sure what the trustee company’s ACN is, you can do a search for the ACN (if you know the company name) at www.asic.gov.au.
Please do not put any spaces between the numbers, or any brackets. Just put in the numbers in the order that they appear in the company ACN.
For example:
123456789
This hint is provided by Peter Bobbin (Argyle Lawyers).
Yes, you need the full name of the director.
E.g. Han Jian Kang
This hint is provided by Peter Bobbin (Argyle Lawyers).
If the fund has natural person individuals as trustees, there must be at least 2. All members of the fund must be trustees and all trustees must be members.
For a single member SMSF where a company trustee is not used, the SMSF must have two natural person trustees. One of the trustees being the member of the SMSF and the other trustee being:
(1) any relative of the member; or
(2) any other person that is not the members' employer.
This hint is provided by Peter Bobbin (Argyle Lawyers).
You can use your home address, your business address, your accountants address or any address that is convenient for you.
However, please use a physical address, not a Post Office Box address.
This hint is provided by Peter Bobbin (Argyle Lawyers).
This kit only allows for one person at a time. However, if you wish to set up a pension for another person in this Self Managed Superannuation Fund then we will let you do so at a 50% discount on the second and subsequent members. Just ring 08 9476 4900 to get your 50% discount voucher.
Remember this only applies on the second and subsequent persons seeking a pension in this fund.
This hint is provided by Peter Bobbin (Argyle Lawyers).
There are two ways of selecting the date - either directly in the field, or using the inbuilt calendar.
To enter the date directly in the field, simply enter it in either dd/mm/yy format or dd/mm/yyyy format.
To use the inbuilt calendar, click on the button to the right of the date field - a calendar will show up.
Firstly select the year - click on the arrow to the right of the year and use the + or - buttons at the bottom and top respectively of the year field to scroll through to the year you require.
Then use the arrows to the left and right of the month field to select the appropriate month.
Finally, in the actual calendar, click on the relevant date.
This hint is provided by Peter Bobbin (Argyle Lawyers).
Preservation age is generally the age at which a person is allowed to access their superannuation benefits if they have stopped working, unless other extenuating circumstances occur and the requirements which permit accessing the benefits early are met. A person’s preservation age depends on their date of birth, as set out in the following table:
| DATE OF BIRTH | PRESERVATION AGE |
| Before 1 July 1960 | 55 |
| 1 July 1960 – 30 June 1961 | 56 |
| 1 July 1961 – 30 June 1962 | 57 |
| 1 July 1962 – 30 June 1963 | 58 |
| 1 July 1963 – 30 June 1964 | 59 |
| After 30 June 1964 | 60 |
This hint is provided by Peter Bobbin (Argyle Lawyers).
Conditions of Release are the events that a person must satisfy to enable them to withdraw their preserved benefits (ie benefits which must be retained in a superannuation fund until Preservation Age has been attained) and restricted non-preserved benefits (that is, benefits to which preservation does not apply, but which cannot be accessed until a condition of release has been met) from a superannuation fund. You need to be aware that the conditions of release are also subject to the rules of your individual superannuation fund (as set out in the trust deed). It is possible that a benefit may be payable under the SIS Act but cannot be paid under the rules of your fund.
Superannuation is money invested for a member’s retirement. It enjoys tax concessions, provided it is not accessed until the member meets certain conditions, which are generally retirement-related.
According to the superannuation law, a member’s preserved benefits and restricted non-preserved benefits may be paid out for the following reasons:
1. Retirement
Actual retirement depends on a person’s age and, for those under 60 years of age, their future employment intentions. A retired member cannot access their preserved benefits before they reach their preservation age.
A member who has reached their preservation age and is aged less than 60 retires when the arrangement under which they were gainfully employed ceases and the Fund Trustees are reasonably satisfied the member does not intend to be gainfully employed (for at least 10 hours a week) in the future.
When the member has reached 60 years of age, their retirement occurs when an arrangement under which they were gainfully employed ceases. There are no ‘cashing restrictions’ for retirement.
Where a member who is aged 60 or more gives up one employment arrangement but continues in another employment relationship, they:
a - may cash all preserved and restricted non-preserved benefits accumulated up until that time, but
b - may not cash any preserved or restricted non-preserved benefits accumulated after that condition of release occurs.
They cannot cash those benefits until a fresh condition of release occurs. If a member aged 60 or more commences a new employment arrangement after satisfying a condition of release, such as retirement from a previous employment arrangement at or after age 60, benefits related to the new employment remain preserved until a further condition of release is satisfied.
2. Attaining age 65 or more
If a member has reached age 65 and is gainfully employed to at least a part-time equivalent level, they may cash their benefits at any time without meeting any other conditions of release.
3. Permanent Incapacity
If a member becomes permanently incapacitated, they may cash their benefits at any time without meeting any other conditions of release.
There are other circumstances which create a Condition of Release but they are not relevant to the commencement of a pension.
This hint is provided by Peter Bobbin (Argyle Lawyers).
If you work for yourself but haven't worked for some time, you may need to formally retire from your business - this may involve ensuring you are paid any outstanding entitlements for annual leave and long-service leave. If you worked for someone else but have not worked for some time, you have probably met a Condition of Release. You should obtain professional advice on this if you are not sure of your circumstances.
This hint is provided by Peter Bobbin (Argyle Lawyers).
At the time you commence a pension if permanent retirement was a factor, it must be your intention to permanently retire from the workforce. If you later change your mind and subsequently return to the workforce, that is a decision you make at that time based on your circumstances. You should obtain professional advice on this aspect if you are not sure of your circumstances.
This hint is provided by Peter Bobbin (Argyle Lawyers).
At the time you commence the pension, it must be your intention to permanently retire from the workforce. If you subsequently return to the workforce, that is a decision you make at that time based on your circumstances. You may need to ensure that any superannuation contributions made in respect of any subsequent employment go to a different fund from your pension fund. Speak to your advisers about this if you are not sure of your circumstances.
This hint is provided by Peter Bobbin (Argyle Lawyers).
An Account-Based Pension is the most common form of Pension currently taken from a superannuation fund. It is specifically allocated to a member and withdrawals are based on your age at 1 July in the financial year in which payment is made.
You may elect at any time, after the Account-Based Pension has commenced, to commute the entirety of your Benefit in the Fund to a lump sum and take the Benefit out of the Fund. In the event you do this, the Trustees will calculate any tax that is applicable (refer the section on Taxation) and pay you the net Benefit in cash. You will then have no further interest in the Fund in respect of your Account-Based Pension. Not all pensions are commutable – for example, a Transition to Retirement Income Stream may only be commuted in certain circumstances
Under the provisions of superannuation law, Account-Based Pensions must meet certain standards:
• You must receive a payment at least once a year
• The amount you receive each year must be no less than the Minimum Payment calculated according to your age, the balance in your Member Account and the Minimum Payment Percentages laid down by superannuation law. In the first year of the Pension, this amount is pro-rated according to the commencement date of the Pension. There are no Maximum Benefits that apply – you may take out any amount over and above the Minimum Payment
• This Pension may not be transferred to another person upon your death unless that person is a Dependant (as defined by the law) and you have nominated that person as being your Reversionary Beneficiary
This hint is provided by Peter Bobbin (Argyle Lawyers).
The Capital Amount is the amount being used to start this pension - it is usually the balance of your account or accounts within the fund (including any insurance payouts to the fund as a result of disability claims).
This hint is provided by Peter Bobbin (Argyle Lawyers).
Start Self Managed Pension without knowing capital amount?
QUESTION: Our client has recently started a pension but the latest account we have completed is for the financial year 18 months ago. Can I still set up a pension today? What amount should I input for the Capital amount question? Is the member’s last year’s balance sufficient to get it going or should I use a best estimate?
ANSWER: Yes you can establish the pension today, and confirm that capital once the accounts are completed, at a later time. (It is better to use your best estimate but if you do not have this put in the capital amount from the last financial statement that you have done.) Then, when you know the current financial year’s balance, simply prepare a minute stating that, further to the previous documentation regarding the starting of the pension, the capital amount is now $xxx and as a result, the minimum pension to be paid is $yyy per month and the member has been notified accordingly.
This hint is provided by Peter Bobbin (Argyle Lawyers).
If you are over age 55 (or such other Preservation Age as may be set down by superannuation law) but have not yet retired from Gainful Employment you may start to take an income stream or pension from your Fund even though you have not met a Condition Of Release. These pensions are called Transition to Retirement Income Streams (or TRIS) and follow the similar rules as an Account-Based Pension with one exception – Transition To Retirement Income Streams are generally not commutable unless certain conditions are met.
You may only commute a Transition to Retirement Income Stream if you retire permanently from Gainful Employment at which time you may elect to:
• continue to receive your non-commutable pension or annuity
• commute your non-commutable pension or annuity and roll it back into the superannuation system
• commute your non-commutable pension or annuity to buy another pension or annuity, or
• commute your non-commutable pension or annuity and take the resulting ETP in cash.
Note that contributions on your behalf to the Fund may continue while you are in receipt of a Transition to Retirement Income Stream – however, they must be kept in a separate accumulation account within the Fund.
This hint is provided by Peter Bobbin (Argyle Lawyers).
This is the amount of money or value you are setting aside to provide you with your TRIS. It may be the balance standing to your benefit in the fund, or it may be some lesser amount.
QUESTION: Do I take the capital amount from the accounts of the fund? How is it apportioned between 2 members- who decides?
ANSWER: The published financial statements of the fund have separate account balances for each member. No more than each member's balance can be allocated to the capital of the pension. A lesser amount may be - especially in the event of a TRIS.
For example:
Member 1 account balance at 30 June
$1,150,000 (commencing a TRIS)
$1,100,000 applied to TRIS
$50,000 remains in accumulation account
Member 2 account balance at 30 June
$650,000 (commencing an ABP)
$650,000 applied to ABP
nothing remains in accumulation
This hint is provided by Peter Bobbin (Argyle Lawyers).
The minimum payment that must be made from a Transition to Retirement Income Stream is related to your age at the commencement of the pension or at the beginning of the financial year in which the payment is made (whichever is the later), as follows:
| Age of Beneficiary as at 1 July (prior to payment) or date of commencement | Minimum payment required as % of fund balance |
| Under 65 | 4 |
| 65 - 74 | 5 |
| 75 - 79 | 6 |
| 80 - 84 | 7 |
| 85 - 89 | 9 |
| 90 - 94 | 11 |
| 95 or more | 14 |
The Government has granted allowances to these percentages due to the Global Economic Crises. For the financial years commencing on 1 July 2011 and 1 July 2012 the percentages were reduced by 25%. For later years it is appropriate to confirm if the Government has continued such a concession. | |
This hint is provided by Peter Bobbin (Argyle Lawyers).
No - you must withdraw the minimum that has been set down by the government.
This hint is provided by Peter Bobbin (Argyle Lawyers).
You may not withdraw any more than 10% of your account balance at the start of the year, under current legislation.
This hint is provided by Peter Bobbin (Argyle Lawyers).
If you are under age 60 when you receive a TRIS, you will be taxed as if this was normal income and you have NOT claimed the tax-free threshold - in other words you will be taxed at your marginal rate. However, you will receive a rebate of 15% to offset the tax paid by the fund. Instead of your tax rate after the tax-free threshold being 19% it is 4% and so on for higher rates.
If you are over age 60 when you receive a TRIS, you will receive this tax-free - it is totally exempt from tax.
This hint is provided by Peter Bobbin (Argyle Lawyers).
By setting up the frequency of payment at the start of the pension, you have documented that the fund meets the legal requirements to become a pension fund.
This hint is provided by Peter Bobbin (Argyle Lawyers).
Under current legislation, you must make at least one payment a year. So, if an annual payment suits your circumstances, that's fine.
This hint is provided by Peter Bobbin (Argyle Lawyers).
Most people opt for either fortnightly or monthly - this way they know that their basic living income requirements are covered and they don't have to cope with the "lumpiness" that happens with investment income. This is especially important as you move from relying on a regular salary to living on the income from your superannuation savings.
This hint is provided by Peter Bobbin (Argyle Lawyers).
Certainly you can change this later - simply write to the Trustees (yes, we know that's you, but you need to have a documentation trail) stating that you want to change the frequency. You (in your capacity as a Trustee) should then write back to you (in your capacity as a Member) acknowledging the change. Remember you control how you want your pension to operate, but you need to show auditors and administrators what changes have occurred.
This hint is provided by Peter Bobbin (Argyle Lawyers).
This is normally today’s date or the date you are seeing your client.
This is the date on which the meeting deciding to start a pension is held. It should be a normal business day, not a weekend.
Ideally, this meeting should occur on or before the pension is to start, but it can occur on the date of the first payment.
This hint is provided by Peter Bobbin (Argyle Lawyers).
This is the date from which the pension is deemed to apply. Usually it would be the first day of a month (the month in which the meeting is held or the following month). Pensions which commence other than on the first day of the financial year should be reduced proportionately. If you only pay the pension once a year, you could deem the pension to have a start date at the beginning of the financial year.
This hint is provided by Peter Bobbin (Argyle Lawyers).
This depends very much on when you meet the Condition of Release - the pension should start after you meet that condition. If you start the pension part way through the year, the amount paid to you for the year should be reduced proportionately.
Start a Superannuation pension without final accounts
QUESTION: My client has a self managed superannuation fund and wishes to start the Transition to Retirement Income Streams (TRIS) from 1 July.
As an accountant, we don’t usually start processing the financials until November, so we won’t have the members exact account balance for 30 June. Generally, the whole of the members account balance is applied to the TRIS.
Should I wait to complete the Pension Pack so I can put down an exact figure for the TRIS pension application? Or can I put down an approximate value and adjust via a minute later?
ANSWER: It is common to want to start the Transition to Retirement Income Streams (TRIS) before you have finalised accounts. This Pension Pack is designed to deal with this. Therefore, even if your client does not have the exact pension amount available at the start of the year, they can choose any date for the start date and the meeting date.
Use the Pension Pack now with a start date of say 1 July. If the whole of the account balance is to be applied toward the pension then say so. Otherwise specify the actual amount. Later, when you have finalised the accounts, you minute the actual capital amount (whatever it is) and adjust the actual pension payments to ensure that at least the required minimum for the full financial year is paid.
I enclose a free copy of a fully compliant SISA Section 103 “initial minute” below.
----------------------------------
Minutes of the Meeting of the Trustees of the
……………………. Superannuation Fund (Superannuation Fund)
Held At: ………………………………………………………………, Australia
Present: All the Trustees were present
The Trustees have been advised by a member of the Superannuation Fund being ………………………………………………….. (Pension Member) that the Pension. Member wishes to commence a Transition to Retirement Income Streams (TRIS) from 1 July 20….. (Start Date)
The Trustees consent to and agree with Pension Member’s request and agree to so establish the Transition to Retirement Income Streams (TRIS) from 1 July ..….
However, it is noted that the financial accounts for the Superannuation Fund are not yet completed. Therefore, this Minute has been prepared to acknowledge the intention to establish the TRIS effective as from the Start Date in the usual terms of the Superannuation Pension provided at www.lawcentral.com.au.
Accordingly the Trustees Resolved that:
Upon confirmation of the capital amount being ascertained based on the financial accounts being finalised that a Transition to Retirement Income Streams be established
With effective commencement date being the Start Date for the Pension Member.
The Trustee (and where applicable each Trustee) acknowledges that it is not a disqualified person under any laws, SIS Regulations including Section 121 of the SIS Regulations.
The Trustee acknowledges that it has the capacity at law to act as Trustee and consents to act as Trustee.
Closure There being no further business the meeting was declared closed.
Signed as a true and correct copy of the proceedings of the meeting
_______________________________
Chairperson (as appointed at the meeting)
_________________________________
Date
This hint is provided by Peter Bobbin (Argyle Lawyers).
Sorry, you can't leave the dates blank. This is a documentary trail of your decisions and actions.
Most people just put in today's date.
This hint is provided by Peter Bobbin (Argyle Lawyers).
If a member dies without nominating a reversionary beneficiary, after a reasonable period following the death the assets become subject to both income tax and tax on any capital gains arising upon realising the assets to pay the subsequent death benefit. If, however, you have nominated a reversionary beneficiary, when you die your pension will continue to be paid to that beneficiary (who must fall within the definition of dependant at the time of your death) as if it were continuing to be paid to you.
This hint is provided by Peter Bobbin (Argyle Lawyers).
This document has been prepared by Peter Bobbin (Argyle Lawyers)
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