14.0Reserves (unallocated benefits)

14.0 Reserves (unallocated benefits)

Report the balance of all reserves as at the end of the year. This relates to unallocated reserves of the superannuation entity (i.e. income that has not been specifically allocated to member accounts). Reserves can be used for such things as smoothing investment earnings, topping up member benefits, offsetting fees.

Defined contribution

Amounts in defined contribution/accumulation superannuation entities that are unallocated to members but do not form part of a formal reserve should also be reported at this item. This includes, for example, unallocated balances which are held overnight in a bank account while the member paperwork is being processed.

Defined benefit:

• Amounts in defined benefit superannuation entities that are unallocated to members but do not form part of a formal reserve will be included at item 15.0 ‘Excess/deficiency of assets’.
• For defined benefit entities, where a formal actuarial valuation has not been conducted as at the year end reporting date, a $Nil balance should be entered at this item.

Note that if all investment earnings and superannuation entity expenses are put through reserves and the members receive earnings and pay fees and contributions tax, these should not be netted together to reflect net movement to or from reserves. Instead they should be reported in line with the entity’s accounting practices with details of movements in reserves during the reporting period as follows:

14.1. Opening balance

Report the opening balance of this reserve carried forward from the last reporting period. Where the reserve is only created this current reporting period, report zero.

14.2. Transfer to reserve from current year earnings

Report the cumulative value of funds that have been transferred from current year’s earnings to this reserve during the current financial year of the superannuation entity.

14.3. Transfer from reserve to members vested benefits

Report the cumulative value of funds that have been transferred from this reserve to members’ benefits during the current financial year of the superannuation entity.

14.4. Closing balance

Represents the sum of items 14.1 and 14.2 less item 14.3.