When a member of an SMSF dies, they generally believe that the remaining trustees will direct any benefit as intended.
However, this is not necessarily the case.
The only way that a member can be certain their benefits will be paid the way they intend, is if they have made a valid binding death benefit nomination (BDBN). If this does not exist, payment will be at the discretion of the surviving trustee(s).
In considering making a BDBN, a member should consider the following:
Further, members of superannuation funds also should be aware that:
A member's personal situation can have a bearing as to whether or not to use a BDBN, as can the structure and relationship of fellow trustees.
Therefore, BDBN arrangements are generally not a "one-size-fits-all" situation and should be an important part of discussions with your clients about their intentions.
SuperStream is a government initiative that is aimed at improving the efficiency and transparency of the superannuation system.
It does this by requiring all employers and funds (including SMSFs) to comply with minimum payment and reporting obligations in relation to employer contributions.
These requirements are set out in the Superannuation Data and Payments Standards 2012 (the 'Standard').
Broadly, in relation to contributions, the Standard has imposed the following obligations on employers and superannuation funds (including SMSFs), generally from 1 July 2014:
The new SuperStream Standard does not apply to employers and SMSFs in relation to employer contributions that are made to an SMSF by a 'related party' of the fund (as defined in the superannuation legislation). This means that contributions made to an SMSF by a related employer are exempt from the SuperStream requirements and can be made using existing processes (e.g., by cheque).
The general start date of 1 July 2014 is subject to transitional rules, so that the date for SMSFs to be fully compliant depends on the size of the employer contributing to the fund, as follows:
However, if the contributing employer complies with the Standard early, then the SMSF must also comply by the earlier date, otherwise the employer may have to redirect contributions for a member to the employer's default fund.
SMSF trustees are required to comply with the Standard to the extent that it applies to them. Failure to do so may result in penalties being applied.
Detailed advice should be sought as required in relation to these measures to ensure compliance.
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