Difference Between Daily and Annual Services

The Daily and Annual YourSMSF services are designed to appeal to two very different types of clients and this Frequently Asked Questions (FAQ) sheet is intended to help you to decide which service is best for you.

What is the essential difference between the Daily and Annual Service?

The Daily and Annual Services are designed for two different types of clients. The Daily Service is a premium service that offers real time administration of your Self Managed Superannuation Fund (SMSF) by taking over many of the administrative functions for the Trustee. The Annual Service provides the same high level of reporting but relies on the Trustee to run the day to day affairs of the SMSF including gathering and maintaining all source documentation. Importantly, while the proactive nature of the Daily Service allows Supercorp to assist the Trustees with the monitoring of compliance with superannuation law the retrospective nature of the Annual Service leaves this as the total responsibility of the Trustee.

What happens to my SMSF Mail or E-mail Correspondence?

Under the Daily Service all SMSF related mail is directed to Supercorp in the first instance where it is then automatically sorted and scanned into our electronic storage facility. Any mail which requires immediate attention is then actioned by our Transaction Team to ensure that it is immediately reflected in the fund accounts. This includes, asset buys and sells, dividend notices, rent payment, tax refunds etc. Any mail which requires a specific Trustee signature such as a Rights Issue is immediately forwarded onto the Trustee (unless they have asked us to hold the mail because they are travelling etc.) for their attention. Email correspondence is dealt with in a similar way and is rapidly becoming the preferred method of communication for many organisations. Under our Annual Service the Trustee should be reviewing all mail daily to ensure that there are no actions which must be completed for the SMSF. Reviewing mail is not part of the Annual Service so even if you send it to Supercorp it will simply be scanned and stored for inspection after the current financial year.

What happens to ATO Correspondence?

Supercorp will be the tax agent for your SMSF so any relevant tax information received from the Australian Taxation Office will be forwarded to you as part of both our Daily and Annual Service.

What about Insurance – is this affected?

Insurance is an important part of many SMSFs and the timely renewal of your Risk, Property and any other Insurance is critical to the protection that these products are intended to provide. Under the Daily Service Supercorp will monitor these and acting under your authorisation will automatically pay the premiums well in time for renewal. The Annual Service does not provide this option so Trustees must ensure that they receive the premium notices from the underwriters and then pay them on time.

What happens when there are Share Offers?

Share offers can be a useful and valuable way to increase your share portfolio holdings often at rates that are below the current market value but they usually come up with little warning and are often overlooked by busy Trustees. Under the Daily Service Supercorp will review incoming mail and ensure that any urgent response required mail (such as rights offers for listed securities) is immediately forwarded to the Trustee and highlighted for their attention. The Annual Service is retrospective and cannot provide this function so Trustees must ensure that they have advised the Share Registry of their current address and that they respond to any share offers (etc.) in time to claim their rights.

How does my SMSF interact with Banks?

Clients using our Daily Service must use the DDH Graham Bank of Queensland Money Market Deposit Account. This is an at call bank account which offers very competitive interest rates. This primary bank account is electronically linked to Supercorp software systems to allow for daily reconciliation, compliance checks such as ensuring the account balance does not become negative and maximizes our control and security. Daily Service clients can take advantage of our free automatic bill payment service and Supercorp will process all pension payments, tax payments, administration fees, audit fees etc on behalf of the Trustees. Trustees may also choose to have additional bank accounts within their SMSF which will be reconciled monthly and attract a fixed annual admin fee per additional bank account in addition to the standard admin fees. Clients using the Annual Service may utilise any bank accounts they require but Supercorp will not be able to provide any banking service. These bank accounts are reconciled once per year retrospectively and the administration fee will include the time required to review the bank statements (once these are sent in by the client), identify any unknown transactions, enter these into our systems and reconcile them against the bank statements. While there is no specific additional charge for each bank account the more bank accounts in the fund the longer (and more expensive) it becomes to administer it.

How do the two services deal with Pension Payments?

For most Trustees who wish to draw a pension they either draw a regular amount say monthly or perhaps at less frequent intervals eg. they may draw an amount down once per year. If you require a regular payment this will most probably be done via a Periodical Payment Authority (PPA) which is put in place with your primary bank account. In the case of our Daily Service clients Supercorp will monitor these pension payments to ensure that the PPA is the same as the amount being entered into our administration system and that this continues to satisfy the correct Maximum and Minimum pension requirements. Where clients wish to adjust the payment amount during the year Supercorp staff will adjust the PPA and recalculate the annual amounts in advance to ensure that these changes are within the required legislative limits – a small administration fee is charged for each payment change. In addition to these services throughout the year, Daily Service clients’ pensions will be reviewed in June each year to be certain that they have not unintentionally breached the pension requirements. The aim of this service is to provide Trustees with complete peace of mind when it comes to their pension.

Annual Service clients will be advised each year of the correct maximum and minimum amounts for their pensions and must ensure that they draw an amount within these limits. It is vital that Trustees ensure that the pension payments they have taken within the financial year are no greater than, and no less than, the legislated minimum and maximum current for that year.

How is my Direct Property handled under each Service?

Managing real rental property is an important task as normally there are so many third parties involved. Third parties may include local council for rates etc, the department of natural resources for land tax if applicable, body corporate, insurance companies, real estate agents, tenants (if they are paying direct) etc. In the case of Daily Service clients our Transactions Team will normally deal with all of these parties on behalf of the Trustee to ensure that communication is responded to (or at least brought to the attention of the Trustee) and that bills are paid on time. While services such as following up delinquent rental payers are outside of the scope of our service the majority of third party interactions are covered. In the case of our Annual Service clients the information provided to Supercorp at the end of the year is used to provide comprehensive reporting on the property as part of the fund accounting process. Our reporting service also includes calculation of depreciation schedules where appropriate.

How can I keep the cost of my Annual Service to a minimum?

Under the Annual Service, Supercorp can’t review your fund correspondence as it arrives, however, it is still vitally important that you retain this information and forward it to us after year end. Trustees who have elected to have Supercorp process their IAS/BAS returns each quarter will be required to send in their information quarterly as soon as possible after 30 September, 31 December, 31 March, and of course 30 June. All other Trustees simply have to send in their information after 30 June.

It is easier and saves time and money if all the information for the quarter or for the year is sent in one parcel so there is no doubt that it is all complete. Supercorp will review and process the information to create the statutory accounts for the year just ended. Trustees may, of course, elect to send the information in more frequently and we will accept and record (scan) it but we are not able to review it. This approach can sometimes work out more expensive for Trustees as there is more communication required between Supercorp and the client to ensure that nothing has been missed.

The retention of all the fund correspondence and records each year is often described as the biggest challenge for Trustees managing their own SMSF (hence the reason they turn to our Daily Service) but the retention and then subsequent delivery of the information in one concise bundle will also have the greatest impact on the cost of the administration. Clients with a standard sized fund with listed investments and who are able to provide all the information required in one neat package will generally be able to have their funds completed within the minimum Annual rate. The greatest impact on costs apart from transactions numbers or assets numbers/types is the level of follow up and reminder notices Supercorp is required to generate for information.

What information must I send through each year on the Annual Service?

While the type of information required does vary depending on the type of investment and the specific circumstances of the SMSF the following is a guide on the type of information required each year under the Annual Service:

  • All Bank Statements for all bank accounts which were ever open during the year
  • Term Deposit/Fixed Interest/Debenture Statements
  • Shares (Holding Statements, Contract Notes, Dividend Notices)
  • Unit Trusts and Property Trusts Records and accounts
  • Portfolio Management Reports (Quarterly and Annual)
  • Pooled Superannuation Trust reports
  • Rental Properties (Receipts, Invoices, Fees)
  • Collectibles details including valuation certificates etc.
  • Loans or Mortgage details
  • Other Assets information
  • All documentation to support expenses
  • Trust Deeds (if not a Supercorp standard deed)

Can I change from one Service to the other?

Trustees can elect to move from either Service to the other service at any time so long as they have satisfied the requirements of the Service they wish to transfer into. For clients wishing to transfer from Daily to Annual Service they must:

  • Request a listing of all their assets and organise a change of address for all the information to their own mailing address
  • Request that Supercorp ceases the operation of the Daily Service with effect from an agreed date
  • Supercorp will then transfer control of your DDH Account back to you and cease charging the fixed monthly admin fee. We will also send you information to assist in your management of the fund going forward and agree on a date for the return of fund correspondence so that we can prepare the end of year accounts under our Annual Service.

For clients wishing to transfer from Annual to Daily Service they must:

  • Request Supercorp to open a DDH Account on their behalf
  • Request Supercorp to assist them to change the mailing address for the fund correspondence
  • Send in all fund correspondence received to date
  • Change the fund over to the Standard Supercorp Trust Deed which will then be maintained in line with current legislation requirements at no additional charge
  • Consider establishing a Corporate Trustee if one is not already in place
  • Transfer sufficient cash into the DDH Account to operate the fund on a day to day basis. We recommend a minimum balance of $3,000 to ensure sufficient liquidity with the fund and to allow Supercorp to efficiently make payment of fund bills, such as rates notices, share trades etc.
  • Provide any specific instructions required for the fund

Supercorp is very proud to provide industry best practice services on both an Annual and a Daily basis. Irrespective of which service our Trustee clients choose they can be assured that they are receiving the highest quality from one of the largest and most successful administration operations in the country. Our attention to detail, our staff training programme and our focus on servicing the client are the hallmarks of our 25 year history and we look forward to clients putting us to the test.

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