How much does SMSF Australia charge for annual SMSF accounting?

SMSF Australia offers three fixed-fee annual packages: Basic Fund at $1,300+GST (listed shares, managed funds, ETFs, term deposits), Complex Fund at $1,600+GST (adds direct property up to 2, cryptocurrency, precious metals), and Very Complex Fund from $2,000+GST (unlisted assets, private loans, derivatives, NFTs, 3+ properties). All packages include the independent SMSF audit at no additional cost.

Is the SMSF audit included in the annual fee?

Yes. The independent SMSF audit is included in all three annual fee packages — Basic, Complex, and Very Complex. It is not charged as a separate add-on.

Can SMSF Australia service my fund if I am not in the same state?

Yes. SMSF Australia operates nationally across all Australian states and territories. All client meetings and services are conducted via Zoom — there is no requirement to be near a physical office.

How much does it cost to set up an SMSF with SMSF Australia?

The SMSF setup fee is $2,000+GST, which covers corporate trustee establishment (ASIC fee $636), SMSF trust deed ($400), Class Super first-year licence ($250), ABN and TFN applications, investment strategy preparation, and rollover coordination.

Does SMSF Australia provide financial advice?

No. SMSF Australia does not provide financial planning or investment advice. Services are limited to SMSF accounting, tax, audit, compliance, and legal matters.

What is an SMSF pension commutation?

What is an SMSF pension commutation

A pension commutation is simply the conversion or transfer of part or all of the remaining pension entitlement into a lump sum payment which can be paid to an eligible member or rolled over into another complying super fund. Alternatively, it can be rolled back into the member’s accumulation account. However, a death benefit pension is quarantined and cannot be rolled back into a member’s accumulation account.

In this article when we refer to a pension it is an account-based pension which is in retirement phase. An account-based pension not in retirement phase is a Transition to Retirement Pension (TRIS). Please refer to SMSF pensions for further details.

Is a large payment a pension commutation?

A large payment drawn from an SMSF pension is a pension payment unless the member advises the trustee in writing that they want it withdrawn as a partial pension commutation.

Do I need to report a pension commutation to the ATO?

Yes. It must be reported in the quarterly “Transfer Balance Account Report” (TBAR) to the ATO as a transfer balance cap event which will reduce your transfer balance and free up room under your “Transfer Balance Cap” (TBC).

Hint – Personal Transfer Balance Cap is the total amount of super an individual can take as a retirement phase pension across all super accounts. The transfer balance account is the movement between the pension commencement capital and any partial or full commutations.

Does a large pension drawdown have to be reported to the ATO?

A large pension drawdown is not reportable to the ATO as part of the fund’s quarterly TBAR. It is not a transfer balance cap event as it does not reduce your transfer balance. However, the total amount of your pension payments is required to be included in the fund’s member section of the annual return.

Do partial pension commutations count towards my pension minimum?

No. The law was changed on 1^st January 2017 to prohibit a lump sum payment arising from a partial pension commutation to be counted as a part of the annual pension minimum payment.

Can a partial pension commutation be satisfied by an in-specie payment?

Yes. A partial pension commutation is a lump sum payment and therefore can be satisfied via an in-specie payment to the member. The payment must be allowed under the fund’s trust deed. As the asset is a disposal from the fund capital gains tax needs to be considered. The member should also consider stamp duty for in-specie property payments and ensure the payment is made at market value.

Can I commute 100% of my pension?

Yes. The pension, whether it is a retirement phase pension or a TRIS, can be fully commuted. Refer to the following considerations.

Considerations when fully commuting a pension?

Stopping a pension part way-through a year

Pro-rata the annual pension minimum to the date of the commutation and ensure it is paid before the pension ends which is when the decision is documented to commute the pension in full i.e. The pension minimum for Ava’s pension for 2023/24 was $5,000 and as she is planning to fully commute her pension on 31^st December 2023, she must draw at least 50% x $5,000= $2,500 before the 1^st January 2024.

Effect on the fund’s exempt current pension income (ECPI)

The timing of fully commuting a member’s pension can significantly affect the tax exemption on the income arising from the pension i.e. a fund owing a property and using the segregated method sells the property on the 1^st June after fully commuting the pension on the 10^th May does not have a tax exemption on the disposal of the property.

Effect on a member’s Commonwealth Seniors Health Card (CSHC)

Prior to 1 January 2015 it was possible that SMSF members with very large super balances to also have access to CSHC as there is no assets test and it had a very generous income test. However, the rules changed, and new pensions must pass a deemed income test which is far more restrictive. A grandfathered pension is one in place prior to 1 January 2015 and continues to access the old income test. Changes, such as stopping and combining new contributions into a new pension or changing providers, made to that pension after that date can result in losing the benefits of the CSHC.

Reporting the commutation to the ATO

The pension commutation in relation to a retirement phase pension must be reported to the ATO in the fund’s TBAR. It must be reported within 28 days after the end of the quarter in which the payment was made i.e. Eve partially commuted $20,000 from her pension on 10^th February 2024 and her SMSF must report the commutation in a TBAR by the 28^th of April 2024.

Commutation of a Transition to Retirement Pension (TRIS)

A TRIS can only be fully commuted by rolling it back into a member’s accumulation account. It cannot be fully commuted and paid as a lump sum to the member. The annual pension minimum is pro-rated and must be paid prior to full commutation. A TRIS is not reportable in the fund’s TBAR. A partial commutation is not allowed.

In this article, we limited the discussion to a pension commutation of an account-based pension. Commuting a legacy pension such as a market linked pension, lifetime complying or life expectancy pension is beyond the scope of this blog. Please contact your SMSF adviser if you do require information in relation to these types of pensions.