CALL US: (07) 3367 0999 | EMAIL US:

Understanding SMSF trustee responsibilities

Self-managed super fund (SMSF) trustees have onerous duties and responsibilities in relation to the management of their fund.

An SMSF trustee primarily needs to ensure the fund is properly managed for the benefit of members for their retirement.

All trustees must ensure the fund assets are held in trust and invested on behalf of the members. Trustees need to ensure their fund complies with all super rules including super laws and the fund’s trust deed.

Trustees must regularly review and update the fund’s trust deed and investment strategy in accordance with the law and the needs of the SMSF’s members.

Another responsibility is to accept contributions and paying benefits (income streams and lump sums) in accordance with super laws and the fund’s trust deed. Trustees must also advise the Tax Office of any changes in trustees, directors or members within 28 days of the change taking place.

SMSF trustees also have the duty of undertaking various administrative tasks such as lodging annual returns and record-keeping, as well as ensuring an approved SMSF auditor is appointed for each income year.

Where a conflict arises between your wishes as a member and your legal responsibilities as a trustee, you must comply with your trustee obligations. For example, if a relationship breakdown occurs between members, you must continue to act in the best interest of all members at all times and in accordance to the trust deed and with super laws.

It is also critical to keep fund assets (including money) separate from your personal and business assets. Fund assets should be solely used for fund purposes.

Finally, trustees are reminded that member benefits (money or other assets) cannot be accessed earlier than what is legally permitted (generally, until a member reaches preservation age). Member benefits can only be accessed in very limited circumstances, i.e., severe financial hardship and so on.

Remember, contravention of any of the super laws can result in significant penalties, including fines and jail terms.

Business
advice

taxation
planning

compliance
services

News

Expanded super for older Australians

April 12, 2019

The 2019-20 Federal Budget has placed a strong focus on the growth of the economy whilst also having the intention to look after older Australians.

Older Australians will benefit from the work test exemption age being extended from age 64 to 66. The work test requires an individual to work at least 40 hours in any 30 day period in the financial year in order to make voluntary personal contributions.

This change in age will now allow individuals aged 65 and 66 who previously didn’t meet the work test to contribute three years of after-tax contributions in a single year, meaning up to $300,000 can be injected into an account with less than $1.6 million in super (tax-free pension threshold). This adjustment aligns with the increase for the Age Pension from 65 to 67.

Spousal contributions can now be made until age 74, up from age 65, without having to meet the work test. Under spousal contribution regulations, an individual can claim an 18% tax offset of contributions up to $3,000 made on behalf of a non-working partner. A further $3,000 can be contributed but with no tax offset.