What is SMSF Administration?
SMSF administration has a specific definition, but the term is also used to describe all of your SMSF compliance and reporting obligations, including the administration requirements of a SMSF. A helpful way to understand SMSF administration in its specific definition is to consider that running a SMSF is all about steering your own super CART.
CART stands for Compliance, Administration, Reporting and Tax management responsibilities including the task of ensuring that everything gets done when it should, such as meeting reporting deadlines.
Driving your super CART involves the following elements:
- Create a Compliance culture. Life is easy when you get it right from the start. The superannuation rules create excellent opportunities for most Australians without the need to put your retirement savings at risk by breaking the super rules, or missing deadlines or not managing your investments properly.
- Get active on Administration. The key decision you need to make for your SMSF’s administration requirements is whether you do it yourself or you delegate this task to a professional administrator. Note that if you choose to outsource, then you only delegate the task, not the responsibility.
- Be rigorous on Reporting. Are you particular with details? Do you keep your accounts up-to-date? Are you a stickler for punctuality? The answer needs to be ‘yes’ to all of these questions if you choose to run a SMSF, or you need to appoint a service provider who can answer ‘yes’ to all of these questions. You are legally required to keep accounting records, lodge returns and forms, and appoint an auditor to review your accounts.
- Take advantage of super’s Tax treats. Tax-free super for over-60s is a juicy carrot for superannuation savers but super also offers many other tax incentives. As a SMSF trustee/member, you have total control over how you manage your affairs. It can be a financially devastating decision if you choose to ignore the tax rules, and how your super fund complies with those rules.