Retirement Alert Today Edition 08/02

Edition 08/02

25 February 2008

Welcome to this edition of Retirement Income Alert Today. What follows is a brief update on current superannuation and financial planning issues aimed at assisting practitioners.

Headlines

1. New Format For RAT Newsletter
2. News and Media Releases
3. ATO Updates
4. Competency Requirements for Auditors of SMSF
5. SIS Amendment - Transition To Retirement Income Stream
6. Tax Free Benefits - Terminal Medical Condition
7. Training and Development

1. New Format For RAT Newsletter

This will be the last Retirement Alert Today (RAT) newsletter in its current format. As of next edition the newsletter would have experienced a make-over and have undergone a name change - Chartered Accountants Superannuation Bulletin, which will replace RAT will still provide members with the following:

• Review of important legislation and submissions including deadlines relating to the superannuation and financial planning industry
• Lobbying updates
• ATO updates
• News and Media Releases on superannuation
• Other relevant announcements

The reason for the RAT review and subsequent improvements are based on the most recent performance tracker survey results, which found that the newsletter’s member awareness was low when compared to the other subscriber based technical newsletters.

However, while awareness of the technical newsletter was low, those who received the newsletter were satisfied with the content (87 per cent satisfaction).

The look and feel of the technical newsletter will be changed, including its banner and format. The change will also be communicated in Charter magazine and e-Bulletins.

Members are advised that Charter will be used to publish technical stories and less time sensitive opinion pieces, while the e-Bulletins will contain relevant information based on membership segments (Public Practice, Big 4, Chartered Accountants in Business). Members are encouraged to subscribe to all relevant Institute communication to gain a complete understanding of technical information.

All subscribers of RAT newsletter are advised that they will not lose their subscription during the change and improvements to Chartered Accountants Superannuation Bulletin.

Top

2. News and Media Releases

Accounting Bodies Leading The Way With Requirements of Self Managed Super Funds

The Institute of Chartered Accountants today released its minimum competency standards required to audit Self Managed Super Funds (SMSFs).

Unrestricted Access to Superannuation Benefits For Persons With Terminal Medical Conditions

The Minister for Superannuation and Corporate Law, Senator the Hon Nick Sherry, today announced the release of regulations which introduce a new condition of release for persons suffering from terminal medical conditions. Please refer to item 6 of this newsletter.

Governance of Self Managed Superannuation Funds

The Minister for Superannuation and Corporate Law, Senator the Hon Nick Sherry, has commenced consultation with a range of industry organisations and practitioners about a range of practices in self managed superannuation funds (SMSFs).

Top

3. ATO Updates

13 February 2008

ABN registration for superannuation entities Instructions and application form for superannuation entities to register for an ABN.

Change of details for superannuation entities You should complete this application if you are acting on behalf of a superannuation entity and want to update particular details regarding the fund or trust for Australian Business Number (ABN) purposes.

Superannuation seminars March 2008 Provides details on the March superannuation seminar program. This program includes new topics.

14 February 2008

Self managed superannuation fund statistical report Statistics around the self managed superannuation fund market will be made available by the Tax Office every quarter. The contents of this report have been determined following valuable feedback from the superannuation industry.

18 February 2008

SuperUpdate February 2008 SuperUpdate is a monthly electronic newsletter issued to those working in the superannuation industry. It includes information about superannuation issues and changes in the administration of Australia's superannuation system. The newsletter provides summary information and directs readers to other sources for highly technical or more detailed information.

20 February 2008

How to lodge an objection If you disagree with a decision made by the Tax Office under laws administered by the Commissioner, you may have the right to lodge an objection or request a review.

Superannuation Funds Working Group minutes - 21 August 2007 Minutes of the Superannuation Funds Working Group (SFWG) meeting held on 21 August 2007.

22 February 2008

Unclaimed super - information for superannuation providers Information about unclaimed super and superannuation providers' reporting obligations.

Top

4. Competency Requirements for Auditors of SMSF

In light of market growth in the area of Self Managed Super Funds (SMSFs) and recent consultation with the regulator, the Institute along with the other professional accounting bodies, in a joint initiative, have developed a set competency requirements for auditors who audit SMSFs.

It is mandatory for members who sign an SMSF audit report to meet the following requirements:

• Hold a practicing certificate issued by the professional accounting body of which they are a member - the Institute, or one of the other bodies
• Have relevant Professional Indemnity Cover
• Undertake Continuing Professional Development as set out in the requirements
• Ensure that those who perform work on their behalf have appropriate knowledge and experience and are properly supervised in the conduct of the audit

The competency requirements will be operative for financial reporting periods commencing on or after 1 July 2008. However, members will be encouraged to adopt these requirements earlier.

The competency requirements recognise that the audit of SMSFs is an area that has grown significantly and requires additional clarity for members of the three professional accounting bodies as well as users of the audited information.

The three bodies’ quality control procedures will include checking for compliance with these requirements.

Members are expected to review this document to ensure they meet these requirements.

(Note: The importance SMSF audits and of these competency requirements are supported by the AUASB, which is also currently developing a Guidance Statement - “Financial and Compliance Audit of Self Managed Superannuation Funds.”)

view the competency requirements

view the SMSF training days

Top

5. SIS Amendment - transition to retirement income stream

Tax Laws Amendment (2008 Measures No.1) Act. This amendment to the SIS legislation excludes any amount taken, following the commutation of a benefit, from the 10 per cent maximum income stream payment.

For example, a member is in receipt of a transition to retirement pension and is assessed for surcharge. In order to pay the assessment, a part communication is made. This payment is then excluded from the calculation of the maximum 10 per cent, which can be paid to the member.

Worth noting, the second amendment makes it clear that once a person in receipt of a transition to a retirement income stream meets a cashing event, enabling a benefit to be paid, the 10 per cent restriction is lifted.

Top

6. Tax Free Benefits - Terminal Medical Condition

Tax Laws Amendment (2008 Measures No.1) Act. 2008 and Superannuation Industry (Supervision) Amendment Regulations 2008 (No.1) has introduced a new condition of release for those with a terminal medical condition as of Tuesday, 1 July 2008.

To comply with the new condition of release a member must:

• Receive a lump sum
• Have two registered medical practitioners certify that the person has an illness or injury that is likely to result in death within 12 months
• Prove that one of the practitioners specialises in treating the condition
• Take the benefit within the period set out in the doctors certifications

Once the trustee is satisfied that the member has met the above conditions of release, the benefit can be paid.

The income will be deemed non-assessable and non-exempt where the member has the condition when the payment is made and continues to have the condition 90 days after the payment.

The legislation includes a transitional provision for the 2007/08 year enabling a person to receive a terminal medical condition benefit where the member has the condition for a period of 90 days or to Monday, 30 June 2008 whichever is greater.

For example and to illustrate this point, a member receives a medical certification on Wednesday, 20 February 2008 and the benefit is paid on Monday, 25 February 2008. The member must show that they still have the condition at Monday, 30 June 2008 to claim the tax benefit.

The Institute believes that the new condition of release raises further inconsistencies between those who die suddenly and those in ill health. The Institute will continue to lobby for all death benefits to be non-accessible non-exempt income.

Top

7. Training and Development

Chartered Accountants Public Practitioners Conference 2008
Throughout March in Yarra Valley, Gold Coast & Brighton le Sands. Identify key issues and opportunities for small and medium sized practices at the Public Practitioners Conference. Walk away with insights into the key technical, practice management and professional development issues and opportunities that impact your practice.

Accounting and Auditing for the Aged Care Industry Seminar
Throughout March in Brisbane, Melbourne, Sydney, Adelaide & Perth Are you an accountant or auditor for the aged care industry? Acquire essential information and advice to fully interpret relevant accounting standards for your business, clients and staff.

Seminar one - Asset protection

Seminar two - Tax and planning issues

Throughout March and April in Brisbane, Melbourne, Sydney, Adelaide & Perth. Essential information you need to correctly identify and implement tax and planning issues necessary for implementing a business succession plan.

Chartered Accountants Business Forum 2008
Throughout April, May & June in Brisbane, Melbourne, Sydney, Canberra, Adelaide & Perth. What’s your strategy for the year ahead? Join industry leaders and your peers as vital topics are addressed, key technical updates explored, and new ideas and options examined.

Audit of SMSF DVD
*NEW PRODUCT* If you were unable to attend the sell-out workshops in October/November, don’t miss this opportunity to view highlights plus added extras at your convenience.

Simpler Superannuation Technical Paper
These essential updates on the new super landscape are guaranteed to bring you up to speed. Explore the key issues under the new Superannuation regime, with use of examples.

Simpler Superannuation Web Cast
Australia is currently undergoing the most significant changes to superannuation in decades. Be prepared by watching Susan Orchard, from the Institute of Chartered Accountants, discuss the implications to taxed funds.

Top

For further information on this newsletter, please contact:

Natala Low
Special Interest Coordinator
Ph. 02 9290 5526
Email. super.queries@charteredaccountants.com.au

Disclaimers

This is an initiative of, and has been prepared by the Special Interest Team of the Institute of Chartered Accountants in Australia. While every effort has been made to ensure the accuracy of the information contained therein, neither the Institute nor its employees shall be liable on any grounds whatsoever in respect of decisions or actions taken as a result of using this publication. The information provided is a general guide only and should not be used, relied on or treated as a substitute for specific professional advice or referral to the relevant specific standard.

The information is this email is confidential to the named addressee and subject to copyright. No one else may read, print, store, copy, forward or act in reliance on all or any of this email or its attachments. If you are not he intended recipient, any use, reliance upon, disclosure or copying of this email is prohibited and unlawful. If you have received this email in error please notify the sender. The Institute of Chartered Accountants in Australia (ABN 50 084 642 571) does not warrant that this email and any attachments are error or virus free and recommends that all attachments be checked for computer viruses.

Top