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Interesting facts about SMSFs that are paying pensions

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Total pension payments paid to SMSF members

Drawing an income stream from your SMSF can provide great tax benefits for your retirement.

Having saved for retirement, you have the ability to formulate highly effective income streams for today and into the future. SMSF360 helps you to seamlessly move into post-retirement through its all encompassing administration solution. These include:

Understand the type of pension that you can be paid

Your fund’s trust deed will outline the type of pension(s) that your fund can pay in accordance with the super laws. This will be an Account Based Pension where you have retired or obtained age 65. Where you have reached your preservation age and are still working, you have the ability to start a transition to retirement income stream (TRIS). SMSF360 as part of its ongoing administration and compliance services supports trustees and advisers with the implementation and operation of all SMSF income streams.

Take advantage of key retirement strategies

With a strong understanding of the super laws, SMSF360 supports many fund members in meeting their retirement objectives. Helping to create and implement the latest SMSF strategies, we support you in building highly tax efficient strategies for today and tax effective outcomes for the future.

Is the pension reversionary or not?

An important decision in commencing an income stream from your SMSF is whether you wish for the pension to continue to a tax dependant (such as your spouse) in the event of your death. Where you wish for this to occur, you will nominate the pension as reversionary (i.e. the pension automatically reverts to the surviving beneficiary in the event of your death). With a strong understanding of the super laws, SMSF360 can assist in the implementation of income streams and breakdown the issues of whether a pension should automatically revert or not.

Are you going to segregate specific assets to the pension?

Another important decision is whether you are going to make any changes to the fund’s investment strategy as a result of starting the pension. You may wish to simply continue with the fund’s existing strategy and have the pension account proportionately receive its share of investment income each year. Alternatively, you may wish to set aside specific assets to support the payment of the income stream, rather than leaving the assets pooled. SMSF360 can work with you to help identify the key issues where segregation may be beneficial and ensure that you meet the ongoing requirements to claim the fund’s tax exemption.

Ensuring that you meet the requirements of the pension rules

Having commenced a pension, it is critical that the income stream meets the requirements of the super laws and that of the rules imposed by the fund’s trust deed. Failure to do so can prejudice the fund’s ability to claim its tax exemption against the fund’s income for the financial year (0% tax rate). Through our proactive ongoing approach to your fund’s administration and compliance, SMSF360 work closely with you to ensure that the pension obligations are met each and every year, providing you with all the benefits of drawing your SMSF pension in retirement.

Undertake all of the fund's reporting obligations for the pension

SMSF360 as a specialist fund administrator will work with you to ensure that you meet all of the reporting obligations for the pensions being paid each year. In commencing the pension through to the fund’s ongoing reporting obligations, we work with you to ensure that you obtain the many benefits of paying the income stream.

Got a question about paying an SMSF pension?

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