Could Your SMSF Be Working Harder for You?

EOFY planning is done, contributions have been made and the fund’s tax position for last year is settled. It’s normal to feel like the job is finished for a while. In practice, it’s the point where the real work of running a self-managed super fund well actually begins. A strategy only delivers what it’s designed to if it’s implemented properly and reviewed as things change, not left to run quietly until next June. Here’s what’s worth checking now.

Why SMSF management doesn’t stop at EOFY

An SMSF strategy set in June is based on the goals, rules and market conditions at that point in time. All three can shift over the months that follow: contribution caps and pension rules are adjusted periodically, markets move and your own circumstances and objectives evolve. A fund that isn’t reviewed between one EOFY and the next can quietly drift away from what it was actually designed to achieve, often without anyone noticing until it shows up as a missed opportunity or, worse, a compliance issue.

Treating SMSF management as an ongoing responsibility, rather than an annual event, is what keeps the fund working as hard for you as it’s capable of.

Are contributions tracking as planned and within the relevant limits?

Contribution planning made sense in the context of last year’s caps and your circumstances at the time. It’s worth checking that it still holds up. Consider:

• Whether concessional and non-concessional contributions this financial year are tracking to plan, and within current caps
• Whether your income, employment or business circumstances have changed in a way that affects what you can or should contribute
• Whether any carry-forward or bring-forward provisions you’re relying on are still available and correctly calculated

Getting ahead of this during the year, rather than at the eleventh hour before the next EOFY, gives you far more room to adjust if something’s off track.

Are pension arrangements and payments still appropriate?

If your fund is paying a pension, it’s worth revisiting whether the arrangement still fits. Minimum pension payments need to be met each financial year, and it’s easier to manage that steadily than to realise late in the year that a payment is behind schedule. It’s also worth checking:

• Whether minimum (and, where relevant, maximum) pension payments are on track for the year
• Whether your transfer balance cap position is still correctly reflected, particularly if you’ve had any recent contributions, rollovers or pension changes
• Whether the pension structure still suits your income needs and tax position, especially if your circumstances have changed since it was set up

Does the investment strategy still reflect current goals, risks and market conditions?

An investment strategy isn’t a document to file away once written. Trustees are expected to review it and doing so regularly is good practice as much as it is a compliance requirement. Ask whether the strategy still reflects:

• Your current risk tolerance and stage of life, particularly if you’re approaching or have entered retirement
• The fund’s asset allocation and whether it still matches what the strategy document says it should be
• Diversification across asset classes and whether the fund carries concentration you’re comfortable with
• Current market conditions and whether the strategy has kept pace with them

A strategy that made sense when it was written can quietly become outdated if it isn’t revisited as markets and circumstances move.

Is there sufficient liquidity for what’s coming?

Liquidity problems in an SMSF are rarely a sudden surprise. They tend to build gradually, as illiquid assets grow as a share of the fund without enough cash or liquid investments held alongside them. It’s worth checking that the fund holds enough liquidity to meet:

• Upcoming tax liabilities
• Pension payment obligations, if the fund is in pension phase
• Any other known or likely near-term obligations, such as expenses or planned contributions strategies

This is particularly important where the fund holds property or other illiquid assets that can’t be quickly converted to cash if needed.

Are minutes, valuations and other supporting records current?

Good SMSF governance is built on records that are kept up to date as decisions are made, not reconstructed after the fact. It’s worth reviewing whether:

• Trustee minutes have been recorded for key decisions made throughout the year, not just at EOFY
• Asset valuations are current and can be properly supported, particularly for property and other harder-to-value assets
• Documentation for the investment strategy, pension arrangements and any recent changes is complete and consistent with what the fund is actually doing

Keeping these current as you go makes the annual audit and tax return smoother, and reduces the risk of gaps being uncovered later.

Regular attention beats a once-a-year exercise

None of these checks need to be onerous, and none of them require waiting for a formal review date. A fund that receives a little regular attention throughout the year tends to stay far better aligned with its trustees’ goals than one that’s only looked at closely around EOFY. It also means smaller issues get caught and corrected while they’re still minor, rather than compounding into something more difficult to fix.

If you’d like a hand reviewing where your SMSF stands right now, get in touch with a Bentleys adviser. We can help you check contributions, pensions, investment strategy, liquidity and records against where the fund actually needs to be, so it keeps working as hard for you as it’s designed to.

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Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.