Why Are Super-funds An Ideal Investment Option For Your Future

May 17, 2021    accountantinperth

A super fund is a company-sponsored pension scheme for the welfare of its staff. It is also known as a company pension plan. Until retirement or withdrawal, funds invested in a superannuation account can grow tax-free. In Australia, an employer has to put 9.5% of your salary into a superannuation fund. The minimum amount is regulated through the Superannuation Guarantee. You can add to your fund through personal contributions. The government can add to your fund as well through co-contributions and the low-income super contribution. The low-income super tax offset or LISTO is a minimum addition of 500$ to aid low-income workers to save.

Superannuation Investments and Types

A superannuation fund is different from other forms of investment schemes. There are two commonly known types of a super fund:

  • Defined Benefit Pension Plan – This is a type that has a fixed benefit plan. It is set by an employer. It is pre-decided based on factors like service years, income amount etc. The eligible employee receives a definite amount on retirement. The risk here is with the employer as he has to provide the fixed benefit amount.
  • Defined Contribution Pension Plan – This is a type that has a definite contributing amount. The benefit received is determined by the contribution and market forces. This is risky for the employee as they have no idea what amount they are going to get on withdrawal.

The superannuation is part of the Cost To Company or CTC. In the Defined Contribution Pension Scheme, an employee may add to the contribution. An employee can take up to 1/3rd of the total benefit and convert the rest into a normal pension. It is then placed in the fund to receive annuity returns at predetermined intervals of time. In the scenario of a job change, an employee can transfer the superannuation aggregate to a new employer.

SMSF Accountants: What They Do?

SMSF or Self-managed super funds are a form of retirement savings fund. The founders of an SMSF are generally also the trustees. This implies that the SMSF representatives operate it for their interests. They are also responsible for adhering to the superannuation and tax laws. SMSF has certain benefits attached for the members. These are as follows:

  • Incorporation of effective tax management techniques.
  • Flexible decision making in term of investment affairs for changing market situations.
  • Inclusion of up to four members means lower fees and more investment savings.
  • Relatively lower fee charge compared to industrial/commercial funds.
  • Easy estate planning flexibility and control.

SMSF requires an array of tasks to be done such as developing an investment plan, auditing, record-keeping and lodging the SMSF yearly tax return. Are you a Perth businessman looking for an SMSF accountant in Perth? Wondering how they can assist you? A businessman is almost always busy and an SMSF accountant can best help with their expertise and knowledge. Let’s get on with a few accountant responsibilities to know what exactly the roles of an SMSF accountant are;

  • Fund Accounting – Fund accounting includes the preparation of the super fund’s financial statements. Accountants are generally experienced, quick and knowledgeable enough to handle accounting responsibilities. 
  • Fund Taxation – This includes reviewing and analysing taxation needs. According to the Australian Tax Office, an SMSF’s income is taxed at a reduced rate of 15% although conditions apply. The final financial fund report will include any profits/losses made by an SMSF in a fiscal year.
  • Fund Regulation – SMSF trustees are responsible for a range of administrative responsibilities to guarantee that their fund conforms to superannuation regulations. SMSF accountants are better adept at performing administrative duties such as:
    • Ratifying the Trustee Declaration to the Australian Tax Office.
    • Ensuring a trust deed creation before setting up a fund.
    • Reporting fund member or trustee changes.
    • Paying the regulatory tax levied by the ATO.
    • Determining the market value of a fund’s assets.
    • Keeping a tally of general and financial fund records.
  • Trustee Guidance – Usually, a fund member is a trustee of a superannuation fund. An accountant can provide expert guidance and suggestion to the trustee for the proper functioning of the SMSF.
  • Auditing Aid – All super funds need to be independently audited by a licensed auditor. These audits can be created yearly, bi-quarterly or monthly.

Choosing the right SMSF accountant

If you are in two minds about hiring an expert accountant to aid in super fund monitoring, read on. An SMSF accountant is a great option for business owners because of the undermentioned reasons:

  1. Guidance – An accountant can provide experienced insights and suggestions. They have the client’s profit margin in mind. An experienced accountant will always provide beneficial advice. He will suggest different suitable investment options available. A knowledgeable accountant will help you carve out the best investment strategy for long-term benefits.
  2. Efficiency – An SMSF accountant knows the work to be done. He helps to reduce paperwork and arrange important documents in a systematic format. This helps to unload the pressure and stress of the client.
  3. Auditing – SMSF taxation responsibilities include auditing. Auditing demands time and accuracy. It is almost impossible for a client to audit due to a tight work schedule. A tax accountant can easily achieve a streamlined audit report without much hassle. They are professionally experienced and know hacks.
  4. Compliance – Accountants are informed and aware professionals. They are updated on laws relating to SMSF regulation and functioning. They are required to comply with a code of conduct. This allows for mutual trust and confidence between clients and accountants.

Now, you know why taking assistance from a professional is a good deal. However, choosing a particular accountant can be difficult if the approach is faulty. Are you a Perth resident searching for a good tax accountant Perth? What makes a good accountant? How to choose? Here are a few simple steps to get you on the right track.

  • Compare portfolios, performance records, achievements and services provided.
  • Check out reviews, client base and feedback for a proper understanding.
  • Approach a selected few and discuss cost. Effective communication and prompt problem-solving skills are a must
  • Discuss the procedure to assess his expertise area and knowledge.
  • Check if your requirements match his services.

Once you are done with the research and are convinced of the outcome, you can make the final move. It is always better to associate with proficient and professional accountants in Perth, who can extend targeted support. 

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