New reporting requirements for superannuation pensions
With the new super rules beginning on 1 July 2017, your requirement to report information about your SMSF and the pensions it pays you and other fund members may be changing. This is driven by the introduction of the new $1.6 million transfer balance cap which limits the amount of assets you can use to pay pensions from super with.
Currently, pensions only need to be reported once a year through the SMSF annual tax and regulatory return to the Australian Taxation Office (ATO). From 1 July 2018, if a member of your SMSF has $1 million or more in superannuation and a member of the fund is receiving a pension from superannuation assets then your SMSF will be required to report more information about its members’ pension than currently needed. This is so the ATO can accurately monitor your transfer balance cap to know if you have exceeded the $1.6 million limit. Going over the $1.6 million transfer balance cap limit can result in needing to pay additional tax.
You will be required to report to the ATO the credits and debits that count towards your transfer balance cap.
The most common credits are:
- The commencement value of new pensions, including death benefit pensions.
- The value of reversionary pensions 12 months from the time the individual is entitled to receive the pensions.
- The value of notional earnings that accrue on excess transfer balance cap amounts.
The most common debits are:
- Ceasing a pension (known as a “full commutation”).
- Taking a lump sum out of the pension (known as a “partial commutation”)
From 1 July 2018 transfer balance cap credits and debits must be reported within 28 days after the end of the quarter that they occur in. For instance, if you start a new pension on 1 July 2019, then this credit will need to be reported by 28 October 2019.
If your SMSF does not have any members with a superannuation balance of $1 million or more, then you will not need to undertake extra reporting regarding pensions.
“New superannuation pension reporting requirements place greater emphasis on accuracy, timing and compliance.”
How can we help?
SMSF Specialist Advisors can help you understand how the ATO’s new reporting requirements for superannuation pensions may impact you and your fund, either now or in the future. Please feel free to give Cayle Petritsch or Martin van der Saag a call so that we can discuss your particular requirements to ensure your continue to adhere to reporting requirements, keeping your fund compliant.
Cayle Petritsch
SMSF Specialist Advisor
T: 02 9984 7774
Martin van der Saag
Director
T: 02 9984 7774
About the author
Marius Fourie - Director & Business Advisor
As Director and Business Advisor, Marius uses his accounting expertise and empathetic skills to work directly with business owners and help them feel at ease with their finances.
Marius saw a common need in clients that just wasn’t being met by accounting providers.
That need was for clear, open communication and streamlined accounting services that didn’t come padded out with any unnecessary features.
Business owners just don’t have time to compare different accounting firms to see which one has the best packages with the best inclusions (many of which they would pay for but never use).
Key Takeaways
Pension Reporting Is More Detailed
The ATO now requires more frequent and accurate reporting of pension-related events.
SMSF Trustees Carry Greater Responsibility
SMSF trustees are responsible for ensuring pension events are reported correctly and on time.
Transfer Balance Cap Compliance Is Central
Accurate reporting helps the ATO track how much super has moved into retirement phase.
Driven by our values
Effortless and Seamless
On-Boarding Process
Intuitive and Knowledgeable
Direct Expert
Access
Useful and Articulate
Financial
Reporting
Forward
Thinking
Compliance Solutions
Streamlined
Tech
Integrated and Automated
Frequently Asked Questions
What are the new reporting requirements for superannuation pensions?
The requirements relate to reporting certain pension events to the ATO, including the commencement, commutation or cessation of retirement income streams.
Who is affected by the new reporting rules?
Individuals receiving superannuation pensions, particularly SMSF members and trustees, are most affected by the updated reporting obligations.
What events need to be reported?
Reportable events can include starting a pension, partially or fully commuting a pension, and changes that affect the transfer balance cap.
When do these events need to be reported?
Reporting timeframes depend on the type of fund and event, but timely reporting is essential to avoid compliance issues.
What happens if reporting is late or incorrect?
Late or incorrect reporting can result in ATO correspondence, excess transfer balance determinations and potential tax consequences.
When do I need to lodge these pension reports by?
From 1 July 2018, transfer balance cap events generally need to be reported within 28 days after the end of the quarter in which they occur.
North Advisory’s Reviews 
On 
Flo Mitchell
4 weeks ago
Changed to this company in 2019 from former accountant and love their approach of organizing everything for me face to face with Xero set up plus being able to call as much as I need for set annual fee. They also picked up on something that was not done correctly by my former accountant and saved me $4k for this.
Timothy Cummins
A month ago
They the truly the best, Martin and Judy are so experienced, knowledgeable & professonal, also quite like speaking with Rose : ) all people are so lovely!
Michael Iera
2 months ago
Positive, Responsiveness, Quality, Professionalism, Value
Michael Iera
2 months ago
Excellent company in regards to service and professionalism. Very experienced in dealing with complex matters. Highly recommended.
Reach out we are here to help
Recognising the uniqueness of each business, we specialise in customised accounting services crafted to meet your specific needs and drive business growth.
Don’t hesitate to contact us if you’re ready to streamline your financial management with tailored solutions. Your business’s success is our primary focus. Fill in the contact form or call us to book an initial 30-minute chat.
Suite 6, 11 Oaks Avenue
Dee Why, Northern Beaches
NSW 2099
Australia