SMSF (Self-Managed Super Fund)

BETA Release of SMSFs

What you can and can't model in the BETA release

Please note that SMSFs are currently in a BETA release. This means that:

  • You can model SMSFs with:
    • Two people
    • These Investments: Cash, shares/managed funds
  • We encourage you, where possible, to use the 'Control by %' option for controlling assets in the SMSF
  • SMSFs are partially covered in the results (online and in documents).  In particular, please note that the action items may not list all activity in the SMSF, but you can check the detailed reports for more details.
  • You should be aware of some limitations listed below
  • (error) If an SMSF has any of the following you should submit the case to our SDS service or check them carefully (these items will be clearly marked with the rocket icon), as they are not officially part of the websolve:
    • Properties
    • Three or four members
    • Complex requests outside the scope of the current interface
    • More than one SMSF

Optimo Financial is continuing to work on the implementation of SMSFs, and in the production release, we plan to implement an improved methodology to overcome the current modelling limitations.

During BETA phase, we appreciate your patience and welcome your feedback.

Limitations of SMSF modelling in the BETA release

If your SMSF fits the above criteria and only has one member who does not simultaneously have funds in the accumulation and pension phases, the model is already quite robust.

However, if the SMSF has two members and/or a member with funds simultaneously in the accumulation and pension phases, Pathfinder should give reasonable projected results, but please note that there are some structures that are not strictly correct. These are listed in the following table.

Distribution of fees and expenses between members

Applies to the following cases: If the share of the SMSF that each member has varies a lot over the analysis, then members may not pay fees that are proportional to their share of the SMSF. e.g. an individual with a lower balance may be paying a higher portion of the fees than another member with a higher balance.

Background: Pathfinder proportions all general fees and expenses (e.g. admin, audit and adviser fees) to each member based on their balances at the start of the analysis. This is not strictly correct as the share should vary as the members' respective balances vary. It is a reasonable approximation if the variation in the member shares are not large. For most cases, the fees should be relatively small compared to the total SMSF balance, so even if the fees are not allocated as strictly as required, the impact on the final outcome is expected to be minimal.

Fee and expense allocations between accumulation and pension phases

Applies to the following cases: If, in any year, a member has funds in both the accumulation and pension phases.

Background: If an individual only has funds in the pension or accumulation phase, then fees are taken from that phase. However, if the individual has both an accumulation and pension phase, then fees are allocated to the pension phase. We do this for two reasons. Firstly, once a person has both accounts operating they are likely to have the majority of funds in the tax free pension account using the accumulation account to temporarily accept contributions. With recent changes to superannuation allowing a maximum of $1,600,000 to be transferred to the pension account, this assumption may no longer be applicable for funds with large balances. Secondly, if expenses are allocated incorrectly to the accumulation account they could be used to offset contributions tax so we take a conservative view in not allowing this. For most cases, the fees should be relatively small compared to the total SMSF balance, so even if the fees are not allocated as strictly as required, the impact on the final outcome is expected to be minimal.

Asset allocations between members and pension/accumulation phases

Applies to the following cases: If all assets have the 'control by %' option chosen, it should work as expected however, if one or more assets have a different option chosen (e.g. control by $, leave alone), then the case is more likely to be affected. We encourage you, where possible, to choose the 'Control by %' option.

Background: The asset balances for the whole SMSF will follow your instructions, but each member's asset balance may not be held in a similar proportion to the total. Furthermore, proportions may not be consistent between the pension and accumulation phases. For example, if cash is set to have a minimum balance of $20,000, and there are Australian and international shares held in a 50-50 ratio, a particular member's asset balances may not be in the same ratio.

Solve times may be slower

Applies to the following cases: Any case with an SMSF may be affected, although cases with fewer assets in the SMSF are less likely to be affected.

Background: You may need to wait up to 5 minutes for the results to be calculated. If it takes longer, see Tips for reducing solve times or Contact Optimo Financial.

Payment of fees when the SMSF balance goes to zero

Applies to the following cases: If the SMSF goes to zero because the members withdraw all funds.

Background: If an SMSF balance goes to zero, fees and expenses will continue to be paid if it remains open. The workaround is to set an exact year to close the SMSF and then solve the case again.

How to add an SMSF

Items which should be entered under an SMSF:

  • The following information should be added under an SMSF:
    • SMSF details (name, annual administration fee)
    • SMSF Member details (accumulation phase and pension phase balances)
    • SMSF assets and liabilities

To add an existing SMSF:

  1. Go to the Current situation step (top menu) and then the Super & Trusts sub-step, then click the Add SMSF (BETA) button (on the left menu)
  2. Fill in the Member details, including each member's accumulation and pension phase balances, can be entered on the main form of the SMSF
  3. Add existing Assets and loans held in the SMSF with the Add investment to SMSF button on the left menu
  4. To then add new assets:
    1. Go to the Cash flows & Goals > Review super funds step
    2. Find your SMSF in the Existing SMSF section, and click the Add new investment to SMSF button

To add a new SMSF:

    1. Go to the Cash flows & Goals step (top menu), then the Review super funds sub-step, then scroll to the end of the page and click the +Start a new SMSF (BETA) button

    2. You can then fill in Member details

    3. You can then add assets and loans with the Add new investment to SMSF button

Modelling options

Start SMSF
  • When you add a new SMSF, you can choose the year to start the SMSF, and also enter the Establishment fee.
  • If there are existing super funds that you want to rollover into the SMSF, you can set a year to close the super funds and Pathfinder will rollover the funds to the SMSF (if that is the only available super fund left open).
Close SMSF

You can set a year to close the SMSF if the balance is too low or there is another reason to close it.

When you choose to close an SMSF:

  • You still need to set instructions for the assets in the SMSF prior to the SMSF being closed
  • Any instructions for assets in the SMSF that were set to be applied after the closure of the SMSF will be ignored
  • Any expense paid from SMSF (e.g. insurance, planning fees), will no longer be paid once the SMSF is closed
SMSF fees and expenses

The following fees can be entered on the main SMSF form:

  • Establishment fee (for new SMSFs only)
  • Annual administration fee
  • Annual audit fee

If any other fees are being paid from the SMSF (e.g. financial adviser fees):

  1. Go to the Cash flows & Goals step, then the Cash flows sub-step
  2. Find the Expense section
  3. Add the expense, and in the Ownership field, put the SMSF

For more information, see the Expense in the help documentation.

General tips for setting options for assets inside super
  • If you only have one investment in the SMSF (e.g. a managed fund), then just choose the option.
  • If you have chosen 'Leave alone' or set a minimum balance, this will prevent Pathfinder from accessing these funds for withdrawals from the SMSF (i.e. TRIS, account-based pension or lump sum withdrawal). If you don't want this, you can either change to a more flexible option (e.g. , Control by %) or reduce the minimum balance in the year you would like to allow withdrawals (for more see How to increase or decrease a value in the series builder).
Keep assets in a ratio

'Shares/managed funds' and 'Cash' held in super have a Control by % field option, that allows you to fill in a % of total unallocated funds field. When you fill in this field, Pathfinder will keep the investment in the set ratio relative to all other assets that also have the % of total unallocated funds field filled in.

For example, if you set instructions as follows:

  • International shares: % of total unallocated funds = 60%
  • Australian shares: % of total unallocated funds = 40%
  • Existing balanced fund: Leave alone
  • Cash: Set minimum balance > Minimum balance = $20,000

The Pathfinder will keep the International shares and Australian shares in a ratio of 60:40, regardless of what the balances are for the cash account and 'Existing balanced fund' because neither of these options have the 'Control by %' option chosen).

Work out when to set up an SMSF once a minimum super balance has been reached

If you would like to set up an SMSF once a minimum super balance has been reached:

  1. Run the scenario with their existing retail/industry super funds (and no SMSF)
  2. In the results, check find their total super balances
    1. Go to the Detailed reports step
    2. On the left menu, choose Consolidated
    3. In this report, there will be a line called Superannuation (this will show the total super balances, if the case has a couple)
    4. Make a note of the year their Superannuation reaches your desired balance
  3. Copy the scenario (for more see How to make another scenario for comparison)
  4. In the copy of the scenario:
    1. Close their existing super fund in the year you want to start the SMSF
    2. Add the SMSF, and choose to start it in the appropriate year
Start a TRISSee How to start a TRIS pension (Transition to retirement income stream).
Start an account based pensionSee How to include an account-based pension (ABP).
Voluntary super contributionsSee Retirement planning goal (super contributions and pensions)

Results for SMSF

See Superannuation Results, and Tax results (Individual and super)

Strategy Development Service (SDS) options

If the case includes complex analysis that you are not able to do in Pathfinder yourself, it may need to be submitted to the Optimo Financial SDS. Complexities include, but are not limited to:

In our strategy development service, we offer many options:

  • SMSFs with three or four members
  • SMSFs with properties (including loans)
  • SMSFs with other loans
  • More advanced modelling as required

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