• SMSF management

    Trustee structure

    SMSFs can be established with either a corporate trustee (if all members of the SMSF are directors of the corporate trustee) or with individual trustees (if all members of the SMSF are trustees).

    At 30 June 2014, 77% of all SMSFs had individual trustees, rather than a corporate trustee (see appendix 1, table 6).

    Analysis shows over time there has been a consistent shift away from corporate trustees.Footnote15 In the three years to 2014, there was a 2% decline in SMSFs registering with a corporate trustee. Of newly registered SMSFs in 2014, 92% had individual trustees.

    SMSF payment phase

    For the year ended 30 June 2013, 63% of SMSFs reported they were solely in the accumulation phase, with the remaining 37% reporting they were making pension payments to some or all members in retirement, and so were considered to be in the pension phase. Of these, 11% were in partial pension phase (making payments to some members), while 26% were in full pension phase (making payments to all members) – see appendix 1, table 7.

    Analysis over the five years to 2013 shows a shift of 7% of SMSFs from being solely in the accumulation phase moving into the full pension phase, while the proportion of SMSFs in the partial pension phase remains consistent.

    Of SMSFs that pay a pension to their members for the first time (approximately 14,600 SMSFs) there was a consistent number of 2,100 SMSFs that were in their first year of operation.

    However, of funds established in each year, the proportion making pension payments in their first year of operation trended down, with a 1% decrease over the period.Footnote16

    Of SMSFs starting pension payments in 2013, approximately 43% were more than five years old; 38% were less than two years old (of which 16% were in their first year of operation); and 19% between two and five years.Footnote17

    Analysis shows that of funds established in the 10 years to 2013, 74% have not started making pension payments.

    Service providers

    All SMSFs must have their financial accounts and compliance with the SIS Act audited annually by an approved SMSF auditor.Footnote18 Approved SMSF auditors play a key role in ensuring SMSF compliance with regulatory obligations.

    For the year ended 30 June 2013, approximately 6,650 approved SMSF auditors conducted, on average, 60 SMSF audits each.Footnote19 This compared to 10,000 approved auditors and an average of 42 SMSF audits in the previous year.

    There continues to be a shift towards approved SMSF auditors performing audits for a larger number of SMSFs. From 2012 to 2013, there was a decrease of 15% in approved SMSF auditors performing five SMSF audits or less, while those performing between 5 and 50, and between 51 and 250, SMSF audits increased by 6% and 8% respectively (see appendix 1, table 8).

    Tax agents and accountants also play a significant role in the SMSF sector. Approximately 13,000 tax agents or accountants lodged 99% of 2013 SMSF annual returns.19They had, on average, 31 SMSF clients and a median number of 10 SMSF clients.

    The majority lodged for 10 or less SMSFs (51%), while 16% (or 2,066) had a single SMSF client. By contrast, 6% or 845 tax agents and accountants lodged a 2013 SAR for more than 100 SMSFs (see appendix 1, table 9).

    Footnote 15

    Based on registrations and ABR data.

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    Footnote 16

    Based on SMSF income tax and annual regulatory return lodged data over 10 years.

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    Footnote 17

    Based on 2013 SAR lodged data and ABR data.

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    Footnote 18

    From 1 July 2013, only approved SMSF auditors registered with ASIC can undertake SMSF audits.

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    Footnote 19

    Based on 2013 SAR lodged data.

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      Last modified: 15 Dec 2014QC 43403