Contribution transfers should be active now

Contribution transfers

SMSFs using a clearing house to make end-of-year contributions should have taken action already to ensure the funds are processed by 30 June.

SMSF trustees and members looking to ensure all their contributions are banked into their fund by 30 June should have already taken action if they planned on using a clearing house, according to a technical expert.

SuperGuardian education manager Tim Miller said ensuring all contributions were banked before the end of the financial year was the leading item on any checklist, but warned of possible delays when using clearing houses.

“From a client management point of view we go to some effort to communicate with our advisers and direct trustees to make sure they understand the ramifications of banking by 30 June,” Miller said during a webinar today with SuperGuardian senior client manager Jason Poser.

Poser added that trustees were more prepared with the payment of contributions and their compliance with the due dates had improved over the past five years, but pointed out the addition of a clearing house in that process extended the time frames needed to complete a transaction.

Miller added electronic banking had changed people’s perception of transaction times, but fast transactions did not always occur with SMSF contributions.

“With the clearing house issue, if we are talking about 30 June contribution dates and using a clearing house, you should be talking about a 15 June date instead to ensure the money gets brought into the SMSF by 30 June,” he said.

“We get a little bit relaxed in the world of electric transfers and we think it’s a bit easier and can do it last minute because of banking apps.

“I find, however, when I press that button on my phone and then I go to my bank account, it’s not always immediately there, depending on the relationship between the banks and the naming of the accounts and those sorts of elements.”

While more people were making contributions earlier, Poser noted pension payments were in some cases still being drawn down in the lead-up to the end of the financial year.

“That’s always going to be the case. I think people take their pension as a one-time withdrawal or even a couple of withdrawals in June, and our team are going through the system, making sure people have taken a pension, so it’s a constant monitoring from our team at this time of year,” he said.

Copyright © SMS Magazine 2024

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital