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I am auditing an SMSF FY 2022 (husband and Wife with Corporate Trustee) the husband died on Sep 2021. He and wife are both in Reversionary pension. Both husband and wife have a valid Binding death benefit nomination. The trustee just presented me a minutes of Meeting advising that the total deceased members benefits balance will be transferred to the wife, Is this sufficient? if not what are the documentations required for the audit. Thanks
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Hi Maria
A reversionary pension automatically reverts to the spouse on death so yes a minute noting this would be sufficient upon death. A reversionary pension balance does not get transferred to the wife's balance but continues on as a pension now payable to the spouse.
I note that if there is a valid reversionary pension in place upon death there is no need to consider a death benefit nomination given that a valid reversionary pension automatically reverts to the spouse on death.
The transfer balance account rules and reporting to the ATO re a reversionary pension (upon death) can be complicated so the auditor should consider these as well.
Thanks
SMSF AAA