For Mclowd purposes, an Account means a member account or a pooled fund account. See Section 2.3 GETTING STARTED: SELECTING AN ACCOUNT in the Mclowd User Manual.
Your superannuation is said to be in accumulation phase when contributions are being made and you are growing the fund in anticipation of funding retirement at some future time. Generally speaking, funds are in Accumulation mode prior to retirement.
A member account that is in Accumulation phase (i.e. the member is making contributions to accumulate funds in the account, or an employer is making contributions on the member’s behalf).
A retirement income arrangement under which an individual invests a lump sum and then draws down a regular pension to a value that takes account of expected cash flow needs and life expectancy. The pension is required to be a specified percentage of the total account balance. The applicable percentage is based on age. Income ceases when all capital has been used up.
Allocated Pension Account
This is the most common type of account for retired members and is aimed at those who have fully retired. Typically, a member’s accumulation balance is transferred to an Allocated Pension Account on retirement, and the Fund begins to pay a regular pension to the member. The Fund must pay a minimum amount each year, calculated as a percentage of the end of year fund balance. The percentage changes as the member ages.
A member must have reached retirement age or satisfied a condition of release to be eligible to commence an Allocated Pension Account.
The capital value of an Allocated Pension Account cannot be increased via contributions or rollover (except in accordance with special concessions that may be legislated from time to time, such as the provision for down-sizing a home that is currently before parliament).
The pension can be commuted, stopped and started as required.
Members have the flexibility to draw down lump sum amounts and to adjust their regular pension in excess of the minimum if desired.
Although generally members will want to convert to a pension account at some stage and will draw down most if not all of the capital in the account, they do have the option not to commence a pension but to leave funds in accumulation mode until death. Members can also nominate beneficiaries to whom they wish any balance in the account to pass on their death.
When a Fund comprises both Accounts in Accumulation Phase and accounts in Pension Phase and/or Transition to Retirement Phase, generous tax benefits apply to the share of Fund earnings that correctly assigns to accounts in Pension Phase and to those in Transition to Retirement phase.
In order to ensure that tax concessions are calculated correctly, trustees are required to engage an Actuary to provide an Actuarial Certificate declaring how fund earnings from unsegregated assets should be apportioned. Trustees are required to obtain an Actuarial Certificate when filing a tax return which includes claims for tax concessions for earnings that attribute to pension or transition to retirement accounts.
Note that Funds may segregate assets to belong specifically to particular accounts. In such cases, earnings attribute specifically to the account to which the asset belongs. If all earnings are segregated, an Actuarial Certificate should not be required. However, where assets belong to the Fund, and earnings are shared between pension or transition to retirement accounts and accumulation accounts, the Actuary will need to determine what percentage of shared income attributes to the various accounts in order that the correct tax concessions can be calculated.
Note that an actuarial tax certificate is not required to commence an income stream (i.e. Account Based Pension).
If an SMSF has incurred a tax loss for the financial year, a tax exemption certificate from an actuary is not required.
Trustees may ”make a call” on whether or not an actuary certificate is required, taking into consideration the Fund’s tax position and the benefit of obtaining an exemption vs. the cost of the certificate. However, no exemption can be claimed in respect of pension income and no concessions apply in respect of transition to retirement income unless an actuarial certificate has been obtained.
Mclowd automates the process of obtaining an actuarial certificate from a selection of partner-providers. You can find providers in the Mclowd Marketplace. The Marketplace delivers a convenient solution to the problem of locating quality service suppliers to deliver needed services to help administer your SMSF at the lowest possible cost.
Adjusted Taxable Income
Adjusted taxable income is the income figure used to assess an individual’s eligibility for certain Government benefits, such as Family Tax Benefit, and Commonwealth Seniors Health Card. Income to accumulation accounts in superannuation is not included in adjusted taxable income, but part or all of any income received from a pension account may be counted.
Advisory service fees
This is refers to fees your fund, or individual members, pay for receiving advice about fund investments. This can include advice on investment options, insurance cover, contributions to super and retirement options. Where the fee relates to advice for a specific member, you should allocate it to that member by selecting the member account in the Select Account field of the Add Expense form. If the fee is for advice relating to fund investments generally, choose Fund in the Select Account field. The expense would usually be allocated to Account 5-1130 Management and Administration Expenses.
All Ordinaries Index
An index of companies listed on the Australian Stock Exchange (ASX), which is used as a benchmark to measure the performance of the Australian share market. Other indices commonly used are the S&P/ASX 200 Index and the S&P/ASX 300 Index. See also S&P/ASX 200 Index and S&P/ ASX 300 Index.
Unlisted and non-traditional investment vehicles such as hedge funds, managed futures, commodities, derivatives contracts, and precious artworks and collectibles, and precious metals. Mclowd includes Artwork, Motor Vehicles, and Memorabilia in this category, and also provides an ”Other” option for miscellaneous assets not otherwise classified in the software.
Any item of economic value owned by an individual or corporation, especially one that can be converted to cash. Superannuation Funds typically invest in assets in various classes, such as direct equities (shares), unit trusts, managed funds, bonds, cash deposits, hybrids, property, etc.
Mclowd tracks all assets of your Fund and either updates values automatically (for asset types such as Direct Equities) or allows you to revalue them periodically. It also provides for entry of relevant data from end-of-year statements so that tax obligations for your fund are correctly calculated.
To ensure Mclowd permits relevant data entry and correctly interprets entered data relative to each asset, it is imperative that the correct asset class is chosen when entering assets. Beware, for example, of unit trusts (such as BWP, APA Group, and Charter Hall, for example) that can be set up as Direct Equities, but should be correctly entered as Unit Trusts to ensure you can enter end of year Trust Distribution data correctly. Look for the code under Unit Trusts and look for the words ”Unit” or ”’Trust” in the description. If in doubt, check with Mclowd support before entering the asset.
This term refers to the allocation of fund investments across various different asset classes. The Mclowd welcome screen displays a graph showing asset allocation in your fund.
The value of a company’s assets that underpin its issued shares. Some companies may have a strong asset backing even if the dividends they pay on shares are relatively low.
A portfolio that invests in a group of similar types of assets (eg. Australian shares).
A means test that assesses the value of the assets you own, to determine your eligibility for the Government Age Pension and other social security payments.
The process of assigning a value to an asset, usually the likely sale price if the asset were sold on a given date. See Section 4.3 ASSET VALUATION in the Mclowd User Manual.
The Australian Taxation Office
A no cost service that helps reunite Australians with unclaimed super. Check with AusFund to see if you have lost super that you can claim and add to your super account managed in Mclowd.
Australian Stock Exchange (ASX)
A stock exchange headquartered in Sydney, Australia, created through a merger of the Australian Stock Exchange and Sydney Futures Exchange. The ASX acts as a market operator, clearing house and payments facilitator, and also provides educational materials to retail investors.
Australian Securities and Investment Fund (ASIC)
The Federal Government body responsible for administering and enforcing the Corporations Act and laws to protect consumers in the areas of superannuation, investments, insurance and banking.
A Mclowd feature, accessible when allocating bank transactions or re-allocating items from suspense accounts. If autosave is selected, Mclowd will automatically post certain types of transactions for which imported data is sufficient and no further information is required to complete posting. You will need to select the category. Mclowd will complete the posting as soon as the category is selected.
The mean, or average price, obtained in the purchase of a large number of shares or units.
Australian Prudential Insurance Regulation Authority (APRA)
The Federal Government body responsible for the regulation and monitoring of the insurance and superannuation industries.