NEW SELF MANAGED SUPERANNUATION FUND PENALTY REGIME

From 1 July 2014 be afraid as the ATO will penalise you heavily if you have breached any of the superannuation fund rules.  Not only are the penalties large they apply to all trustees and cannot be paid by the superannuation fund.  Below are some examples of the breaches and the penalty that applies:




Failing to prepare financial statements                                                    $1700


Failing to keep trustees minutes for at least 10 years                              $1700


Providing financial assistance to members and relatives                        $10200


Failing to keep records of change of trustees for at least 10 years          $1700


Failing to sign Trustee Declaration within 21 days of                             $1700
appointment and keeping same for at least 10 years


Failing to keep members reports for 10 years                                         $1700


Failing to notify the ATO of an event that has significant                      $10200
adverse effect on the funds financial position


Failing to notify the ATO of a change of status of the SMSF                 $3400


Failing to appoint investment managers in writing                                 $850


Failing to comply with ATO education directive                                    $850


Failing to formulate, review regularly and give effect to an                    $3400
investment strategy


Failing to have funds financial statements prepared, signed and            $1700
retained for at least 5 years


Contravene borrowing prohibition                                                          $10200

QUICK TIP TO BECOME MOTIVATED ABOUT SAVING FOR RETIREMENT

If you are lacking motivation and direction with regards to investing for the future then answer these 3 questions:


1. What will your income needs be in retirement?
2. How much are you prepared to contribute to your retirement whilst you are working?
3. How long are you going to work for?


Generally your answers will be that the time you have left working and how much you are prepared to or are capable of saving will not accumulate enough asset to generate enough income to support the life you want to live in retirement. 


Then you need to be honest with yourself and face the fact that the only way to try and solve this problem revolves around the following strategies:


1. Save more
2. Work longer or harder
3. Adjust your investment philosophy


or you will just have to be prepared to retire with less and not be able to live the life you want in retirement.


There is no magical answer no matter how many guru's tell you there is.