Close to 600,000 SMSFs are now active in Australia, according to statistics released by the Australian Taxation Office. Statistics also show the average balance of a SMSF now exceeds $1 million, with the average fund balance around $1,050,000.
While taking control of your retirement money is the driving factor in the growth of SMSFs, this control also leads to greater responsibilities as a Trustee of your own superannuation fund.
Being a trustee of an SMSF brings with it a range of legislative and regulatory obligations.
Under the Superannuation Industry (Supervision) Act 1993 (SIS Act) and Superannuation Industry (Supervision) Regulations 1994, a trustee is required to; –
On top of legislative requirements, there are rules set out in the trust deed of your SMSF. As a trustee you must meet the following criteria.
A self-managed super fund’s sole purpose is to provide its members with retirement benefits. Therefore, it is the trustee’s responsibility to ensure this requirement is being fulfilled.
It is the trustee’s responsibility to develop and implement an investment strategy. Ideally, this is a written document that can be presented to an auditor.
Trustees are also limited to the investments they are permitted to make with superannuation funds. This includes lending money to a member of the fund or buying assets with the superannuation money that has not been approved.
It is the trustees responsibility to understand and adhere to the rules for accepting contributions and paying benefits. Eligibility depends on the member’s age, their employment status and the type of contribution to be made. Trustees are also required to allocate super contributions to members’ accounts within 28 days after the end of the month in which they were received.
Last but not least, it is a trustee’s responsibility to properly administer the SMSF. This includes keeping accurate records, arranging an annual return for the SMSF and notifying the Australian Tax Office (ATO) of any changes details. Trustees are also required to record minutes of all trustee meetings and appoint an approved auditor to audit the fund for each income year and provide any documents the auditor may request.
At BDH Leaders, we have the right advice for your SMSF. View more information on our SMSF service here .
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