Documentation, Pensions

Pension tool targets documentation accuracy

pension documentation

Heffron has released a new pension documentation tool aimed at providing more clarity around the timing and decisions that led to the start of a pension.

SMSF administration service provider Heffron has rolled out a new tool designed to help fund trustees and their advisers create pension documentation that identifies when a pension started and the decisions around that process.

Heffron managing director Meg Heffron said the new Pension Pack tool reflected how income streams are actually created within an SMSF rather than sticking with the current industry practice of preparing documents after the pension started, but phrasing them as if the documents were signed in real time.

“Sometimes the precise amount used to start a pension is known well in advance and documented upfront. More likely, the member knows they will commence a pension with their full account balance, but won’t know exactly what that will be until the financial statements are prepared,” Heffron said.

“The documentation needs to reflect the fact that it is either confirming a decision made some time ago to start a particular pension or flag that the pension is being documented before it starts but some information will be added later.”

According to the firm’s website, the new tool uses specifically structured documents to allow trustees to set up a pension in advance and complete additional information at a later date or make it clear the documentation was prepared after the event and is ratifying decisions already made.

“The tool incorporates all the checks and reminders we would use in our own practice before setting up a pension. This is one of the areas where we think we can really help advisers and accountants – using our knowledge of the rules and actual industry practice to get their documentation right,” Heffron added.

The Pension Pack is part of the firm’s existing Super Toolkit, which also includes investment strategy, COVID-19 rent relief and investment strategy review functions.

Heffron clients will have access to the new tool as part of their existing monthly Toolkit subscription.

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