New rules introduced as part of the ‘Stronger Super’ reforms will compel trustees who break super laws to undertake mandatory education
The measures, which came into force on 1 July 2013, will tighten the responsibilities of SMSF trustees. In order to remain compliant with SMSF rules, trustees should be aware of their obligations.
The primary concern of trustees is to manage the fund for the benefit of members for their retirement, as well as ensuring fund assets are held in trust and invested on behalf of the members.
All trustees are equally responsible for managing the fund and making sure it complies with super laws.
Some of the rules that trustees must adhere to include:
- Making sure that the fund adheres to the sole purpose test in providing retirement benefits for its members.
- Taking care of administration tasks such as compliance, tax reporting, member statements and annual returns. These may be outsourced to a relevant professional.
- Ensuring that members’ benefits are not accessed earlier than is legally permitted. As a general rule, members’ benefits must be preserved in the fund until they reach their preservation age.
- Separately managing the affairs of the fund and their own personal or business affairs. This includes keeping personal and business assets separate from fund assets, and ensuring those assets are used solely for fund purposes.
- Making investment decisions that fall within the super laws, including borrowing money for property.
- Paying member benefits and accepting member contributions (such as SGC and Salary sacrifice) as per super and taxation laws.
- Updating the trust deed should the trustee/s change.
- Ensuring that there is an independent audit of the fund each year by an approved auditor.
Trustees are encouraged to outsource any tasks they are not entirely suited for, such as auditing, taxation requirements and investment advice, to professionals who may be in a better position to advise the fund and make sure that the trustees are compliant in their decisions.