The introduction of the $1.6m cap on pension accounts will result in additional reporting requirements to the ATO by SMSF trustees.
All SMSF’s that are paying retirement pensions to their members will be required to report these to the ATO, even if the total balance of the members pension is less than $1.6m.
All pensions that are paid to an individual will be required to be reported to the ATO which will include from all superannuation funds as well as defined benefit pensions, which are typically from previous government employment.
The good news for SMSF trustees is that they are not required to report anything to the ATO on this until 1 July 2018. At this date all events that impact on a members Transfer Balance Account (from 1 July 2017 until the date of the first report) is required to be reported.
The bad news is that from 1 July various reporting obligations will require transactions that impact the Transfer Balance Account to be reported 28 days after the end of the quarter in which the transaction occurred. Other obligations will need to be reported within 10 business days of the end of the month.
If you are the trustee of a SMSF and are concerned with how these changes my impact the administration of your fund, please contact your local RSM superannuation specialist.