Self Managed Superannuation Funds rules and responsibilities
Whilst there are a number of attractive benefits, there are also important responsibilities that you need to consider.
Self managed super funds (SMSFs) are regulated by the Australian Tax Office (ATO), Australian Securities and Investments Commission (ASIC) and Australian Prudential Regulation Authority (APRA) under various Acts. These acts impose minimum requirements and rules that must be followed by trustees and impose penalties for failure to comply.
Some of the general rules you need to follow as a trustee of a self managed superannuation fund are:
- Act honestly in all matters concerning your fund
- Exercise skill and diligence in managing your fund
- Act in the best interest of all members
- Keep the money and assets of your fund separate from other money and assets (for example, your personal assets)
- Retain control over your fund
- Develop and implement an investment strategy and update the strategy in line with the Fund's circumstances as required
- Can not enter into contracts or behave in a way that hinders you or other trustees from performing or exercising functions or powers
- Allow members access to certain information
- Can not access or allow others to access funds early
When deciding whether to establish a self managed superannuation fund, the ATO recommends you follow these six steps:
- Consider your options and seek professional advice
- Ensure you have sufficient assets, time and skills to manage your own fund
- Follow the super and tax laws and understand the risks
- Tailor your trust deed and investment strategy to suit the members of your fund
- Be sure you can meet your record keeping and reporting obligations
- Make sure you understand your annual auditing obligations.
If you would like to discuss SMSFs and how they can become part of your wealth creation and estate planning strategy, please call our office on 03 9869 5900 or email us for more information.
