In this episode of the SMSF Experts Podcast, Shelley chats with Sean Johnson, SMSF specialist at Heffron, to tackle one of the industry's most pressing challenges: how to process underpaid pensions through SMSF software following the ATO's June 2024 changes to TR 2013/5.

With software companies unable to update their systems for the new rules, Sean reveals a three-step processing solution that SMSF practitioners need to navigate.

Sean explains why the rule changes have created a new software paradigm, requiring practitioners to process funds several times to accommodate the competing requirements of tax law, SIS law, and contractual obligations. From calculating ECPI values to managing TBAR entries and tax component adjustments, this episode provides a step-by-step framework for managing underpaid pensions through SMSF administration software.

(02:00) June 2024: The ATO Changes TR 2013/5

(04:00) Old vs New Rules - Why Pension Failures Now Span Multiple Years

(08:00) The Tax vs SIS Law Problem - Competing Legal Frameworks

(10:00) The Fundamental Challenge for SMSF Software Companies

(12:00) Timeline of Reporting Requirements: What Happens When

(16:00) The TBAR Dilemma 

(20:00) Why Prevention is Better Than Cure - The Case for Data Feeds

(24:00) Post-Balance Date Action Plan - Moving Fast After 30 June

(27:00) Member Account Strategies - The Return of Multiple Pensions

(30:00) The Three-Step Processing Solution - Framework Overview

(32:00) Processing Step One - Calculating TBAR Values & ECPI

(34:00) Processing Step Two - Obtaining the Pro-Rata Minimum Values

(37:00) Processing Step Three - Accumulation Accounts and Tax Component Adjustments

(40:00) Handover Challenges - What Happens When Clients Change Administrators

(42:00) Financial Advice Considerations - The Difference Between Providing Compliance and Advice?

(43:00) Audit Implications - Account-Based Pensions vs Accumulation TRIS

(46:00) Estate Planning Impacts - When Failures Ruin Tax Strategies

Follow Shelley: Linkedin

For more episodes and to sign up for the ASF Audits newsletter, please visit asfaudits.com.au