Superannuation and Your End of Financial Year Checklist

Jun 15, 2022

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With End of Financial Year just around the corner again, it’s time to check in on your Super. Irrespective of the nature of your Super fund, there are several important matters to consider.

Death Benefit Beneficiary

Superannuation does not automatically form part of your Will on your death. It is critical that you have a current death beneficiary nomination to control who will receive your super death benefits.  Some funds periodically request you update or confirm your beneficiaries, so keep an eye on this every year. If you have a Self-Managed Super Fund (SMSF) it is important that your SMSF Deed and or any nomination form specifies who you wish to give to when you are gone.  Given that your Super is more often than not a lifetime of contributions, you want to avoid uncertainty and possible conflict between family members fighting over your Super.  By specifying who you want to give to, you and your family may avoid legal fees down the track.

Insurance cover

Did you know that if you are a member of an industry Super fund for example, you are more than likely automatically paying for all sorts of insurance cover? Check what you are covered for with your Super fund. If you want to remain covered, be proactive and nominate who you want to receive your life insurance policies. If you don’t want insurance in your Super, make sure you untick the available insurance selections. If your Super is inactive or your account balance is low, you may lose access to any insurance depending on the rules of your Super fund.

SMSF compliance

Paperwork, while frustrating to attend to in the short term, can save you and your family time and money down the track. If you have a SMSF, it is critical that it receives your ongoing attention and is compliant. Some pre-30 June activities include:

  1. Knowing the fund rules. They may be dry, but it is important to be aware of what your fund offers you.
  2. Prepare trustee minutes which cover the fund’s investment strategy, tax matters and all other annual compliance obligations.
  3. If you have a trustee company, ensure that your ASIC compliance is up to date.
  4. Check up on the residency status and citizenships of the members to make sure that none of them are foreign persons – Foreign members may not receive any benefit and there could be adverse tax implications. You don’t want to be in the situation where your fund is no longer an Australian Super fund because you haven’t complied with the residency rules.  If this is the case, your fund’s assets and income may be taxed at the highest rate.
  5. Check in on the personal and financial circumstances of all members. This may prompt a Super planning rethink for one or more members.

Invest wisely

Super is often the most tax effective way of growing your long-term wealth and is therefore too important to shelve until a rainy day.

To optimise your investments and minimise your tax:

  1. You may wish to make pre-30 June contributions of your own, in addition to what your employer has contributed on your behalf. Be aware of the ever-changing tax and contribution rules.
  2. You may wish to have a deeper look at your investment portfolio and see if there are any changes you wish to make.
  3. Seek out the help of your accountant, financial advisor and estate planning lawyer.

Interaction with your Will, Enduring Power of Attorney and any Family Discretionary Trust

Super is part of your bigger family wealth creation and protection plan. Like a team, it is often only as strong as its weakest link. All your lifetime, retirement, disability and death planning need to work together to benefit your loved ones and family in the long term. 30 June is an ideal time to revisit your family wealth and estate plan.

The Clinch Long Woodbridge Wills and Estates team is ready to assist you with any or all of the above.

Important Disclaimer: The content of this publication is general in nature and for reference purposes only. It is current at the date of publication. It does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.

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