SMSF (Self-Managed Super Fund)

Due to the complexity of SMSF modelling, you may need to wait longer for the results to be ready.

While you are solving, you can see how hard the solver is working by checking the Solve events . The more iterations Pathfinder needs to do, the longer it will take to solve. You can see how many iterations it is taking to solve, and the time for each iteration, by watching the 'Solve events'. You can also check Tips for reducing solve times.

• 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, then:

  • Go to the Review super funds sub-step (under Cash flows & Goals)

  • Find the super fund you want to roll funds out of

  • With the Super options field, choose an option to either close the fund or choose a minimum balance.  When funds are rolled out, it will roll funds into the SMSF, provided it is open in that year.

You can set a year to close the SMSF if that is part of the strategy you want to model or if the SMSF balance is too low. In particular, if you check your results and see that the SMSF's balance is very low and only being kept open to pay fees and expenses within the SMSF, then it is best to set a specific close date for the SMSF to stop these fees being paid.

To close the SMSF:

• Go to to the Review super funds sub-step (under Cash flows & Goals), and then find the SMSF.

• On the SMSF options field, choose the 'Close SMSF' option

• Then, set a year in the 'Close SMSF in year' field

• When you close the SMSF also keep in mind:

  • 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 the SMSF (e.g. insurance, planning fees), will no longer be paid once the SMSF is closed

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:

   1. In the Ownership field, make sure you put the SMSF

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

Please note that if you enter expenses as cash flows, then you should keep an eye on whether the SMSF balance is low or goes to zero in your results.  If this happens, then you should set an exact year to close the SMSF (at the Review super funds sub-step (under Cash flows & Goals)) and re-solve the case.  Otherwise, Pathfinder will continue to deposit funds into the SMSF just to meet the expense.

• The modelling assumes that assets are not segregated i.e. the proportional method is used for allocating assets

• If you only have one investment in the SMSF (e.g. a managed fund), then just choose the 'Robot' option.

• Make sure you have enough liquidity in the SMSF otherwise you may get errors when starting a pension of make other withdrawals from the SMSF. For example, if you have a shares/managed fund, then choosing 'Leave alone' or setting a minimum balance will prevent Pathfinder from accessing these funds for withdrawals/pensions 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. 'Robot' , Control by %) or change the option to a minimum balance, and then 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).

• For more information on the assets and loans in an SMSF, see the pages for those assets:

  • Cash

  • Fixed interest (term deposits, government bonds)

  • Shares/Managed fund

  • Investment Property

  • Secured loan

'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

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. Pathfinder will make deposits to and withdrawals from the International shares and Australian shares in order to keep the specified ratio.

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 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, at the Review super funds, choose what to do with the existing super super funds, such as:

   1. Close their existing super funds in the year you want to start the SMSF; or

   2. Choose 'Keep a minimum balance' if the funds need to be kept open (e.g. to pay insurances or to receive their super guarantee)

5. Still at the Review super funds, add the SMSF, and choose to start it in the appropriate year and then add the proposed SMSF assets

6. Once you solve the second scenario, you can go to the Compare step, and compare the projected outcomes of starting the SMSF versus keeping their existing super funds.

For more information on making contributions to the SMSF see Retirement planning goal (super contributions and pensions)

Stop rollbacks from pension to accumulation phase

Pathfinder can roll funds from the pension phase back into the accumulation phase if it will optimise the projected net wealth at the end of the analysis.

If you do not want the rollbacks to happen beacuse it makes the results look tidier and easier to implement, they can be switched off.

For some reasons as to why the rollbacks happen, please see Understanding why funds are kept in in the accumulation phase of super instead of the pension phase

• The name of the case

• The name of the scenario(s) you want it applied to

• The name of the SMSF member for which you don’t want the rollbacks to happen, and the years you don’t want the rollbacks to happen. e.g. for the entire anlaysis, from 2025/26 onwards.

We can apply this for both individuals as part of support, however if the request is more complicated than that, additional charges may apply.

More precise SMSF options for rollovers, lump sum withdrawals, when to start an account-based pension

If you would like to model something where the options are not available in the interface, then we can apply a background constraint.

• The name of the case

• The scenario(s) you want the adjustment to be in

• Which member(s) you want the change to be applied to (if applicable)

• What action should modified. e.g. lump sum withdrawals, rolling over to pension phase, rolling funds out, rolling back from pension to accumulation phase

• The financial years you want the action to be applied. e.g. all years or a specific year

• The amounts. it can be zero, or a specific amount in particular years

If it is a simple change to one or two actions, then the change can be part of the standard support. However, if the request is for a large number of actions, then additional charges may apply.

SMSF with three or four members

You can model cases with three or four members, but you should keep an eye on the results. For example, in the action items, assets may be listed as belonging to all members, rather than just the individual who owns it.

• The name of the case

• Any specific issues you want changed

If the adjustments are extensive, then we may suggest you submit the case to the Optimo Financial SDS

SMSFs with loans for shares/managed funds

Please see

SMSF assets that have a negative growth

Pathfinder can only model SMSF assets with a positive return.

That you need to submit the case to the Optimo Financial SDS . Please include:

• The name of the case

• The asset in the SMSF that has the negative return

We would need to figure out whether a workaround is possible. This would require you to submit the case to the Optimo Financial SDS, and then, if it is possible, we will provide a quote.

We will confirm whether it is possible for us to model this for you.

SMSFs that are the beneficiary of a Trust

This is not possible in the websolve, but a workaround may be possible in the SDS.

The name of the case that you would like to submit to the Optimo Financial SDS

We would need to figure out whether a workaround is possible. This would require you to submit the case to the Optimo Financial SDS, and then if it is possible, we will provide a quote.

Reversionay pensions

This is not possible in the websolve, but a workaround may be possible in the SDS.

The name of the case that you would like to submit to the Optimo Financial SDS

We would need to figure out whether a workaround is possible. This would require you to submit the case to the Optimo Financial SDS, and then if it is possible, we will provide a quote.

Starting a second pension for an individual in the same SMSF

In practice, it is possible for an individual to start a second pension in their SMSF without affecting the status of an existing 'Return of capital' account-based pension, however, this isn't possible in Pathfinder.

This isn’t possible in Pathfinder, so an alternative approach would be to add a second SMSF with the new pension and adjust the fees and assets across the two SMSFs so they don’t double up.

If you need a lot of assistance in setting up the workaround, then we may suggest that you submit the case to the Optimo Financial SDS