Fund Bank Account

Managing the fund’s bank account

< Revisit fund establishment guidelines

When opening a fund bank account for the first time, remember it needs to be in the name of the self-managed super fund, and not your personal name (or any other entity’s name). This will enable trustees to:

  • Manage the fund’s daily operation; &
  • Accept cash contributions and rollovers of super benefits when the need arises.
Correct title on fund bank account – “Bob & Jane Citizen ATF Citizen Superannuation Fund”
Incorrect title on fund bank account – “Bob & Jane Citizen”

The contributions and rollovers should be deposited into the SMSF bank account for the following purposes:

  • To make investments in accordance with the fund’s investment strategy; &
  • To pay the fund’s expenses and liabilities when they occur.

Earnings on fund’s investment should be redeposited bank into the fund’s bank account, and not any other bank account. These include (where relevant):

  • Dividends;
  • Distributions from managed funds;
  • Interest Income; &
  • Rental income.

Depending on the investment strategy, one bank account should normally suffice. The fund will need to segregate and apportion the income based on each member’s entitlement, where there is more than one member. This is referred to as a “member account”. SATO SMSF Administration will be able to assist you in this regard, as part of our annual administration and compliance program.

The purpose of the member’s account is to record:

  • Contributions received on behalf of each member;
  • Any fund investment earnings which they are entitled to; &
  • Payment of member’s benefits when the need arises.

Depending on the arrangement for the administration program, the fund bank account can be reconciled on an annual basis as part of the annual compliance, or it can be reconciled on a daily basis. Under the daily administration service, the fund bank account will be reconciled on a daily basis which would allow our organisation to monitor and process all transactions in or out of the fund either that day or within one business day of the transaction being undertaken.

Transfering monies into the fund’s bank account

Some of the major transfers into self managed super funds will be member/employer contributions and ETP rollovers from the member(s) other superannuation providers.

Contributions can be made in a number of ways:

  • Electronic funds transfer (EFT);
  • By cheque forwarded to your nominated banking institution; &
  • In specie transfer (no physical cash, just transfer of title).

Trustees will need to communicate with SATO SMSF Administration how best to treat any contributions received – who it is made on behalf, and the nature of the transaction, whether it is employee or employer contribution. This will ensure the contribution is allocated appropriately and the correct tax treatment is applied. Furthermore, it will also enable monitoring of the contribution threshold, as it is age dependent. Where contributions are made by way of in specie transfers (e.g. transfer of publicly listed shares), our organisation can assist to ensure that the transaction is carried out such that all compliance obligations have been fulfilled.

Withdrawing monies from the fund bank account

Withdrawal of monies from the fund bank account will be possible where preservation rules and conditions of release have been met by members of the fund. These withdrawals (benefit payments) can be paid as a lump sum or in the form of an account based pension. For lump sum withdrawals additional steps will be undertaken to calculate and prepare the minutes of meetings and documentation applicable for the withdrawal. Payment summaries should be prepared and provided to members for lodgement in their personal income tax return.

Where the members elect to receive their benefits payment in the form of a pension, this will be in the form either:

  • An account based pension; or
  • Transition to retirement pension (TTR).

 

 

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