In this episode of the SMSF Experts Podcast, Shelley breaks down the often-overlooked issue of underpaying a pension in SMSFs. While it may seem minor, failing to meet pension payment requirements can lead to serious compliance and financial consequences.
To help unpack this complex topic, Shelley is joined by Peter Crump, Senior Consultant in Private Wealth at BDO Adelaide. With over 35 years of experience advising the SMSF sector and high-net-worth clients, Peter brings deep insight into the evolving regulatory landscape and the significant changes recently introduced around pension underpayments.
Together, they explore the rules that govern pensions, why even small errors matter, and what trustees need to do to stay compliant in light of the new rules.
Listen On: Apple Podcasts, Spotify, Amazon Music, Simplecast, iHeartRadio, Deezer
CONTENT:
[03:45] – What is a Pension in an SMSF?
[06:00] – Minimum Pension Standards & Why They Matter
[08:00] – Consequences of Underpayment
[10:30] – Taxable vs Tax-Free Components
[12:00] – Are Payments Still Valid if You Miss the Minimum?
[13:45] – Why Underpayments Happen
[15:15] – Direct Debits & Best Practices
[17:00] – ATO Relief: The 1/12 Rule
[20:00] – ATO Discretion & Trustee Mistakes
[23:00] – Upcoming Rule Changes in 2025
[26:30] – Timing & Repercussions of the New Rules
[30:00] – Backdating & Legal Risks
[32:00] – Auto-Correction Clauses: Useful or Risky?
[35:00] – Administrative Challenges for Accountants
[38:30] – Software, Tagging & Reporting
[40:00] – ATO’s Motivation for the Change
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