ONE OF THE KEY DRIVERS OF THE GROWTH OF SELF-MANAGED SUPERANNUATION FUNDS (SMSF) IS THE ABILITY FOR YOU TO TAKE CONTROL OF YOUR OWN SUPERANNUATION.
However, it is important to understand that with this control comes increased responsibility, as trustee of your SMSF as you are ultimately responsible for the prudent management of your super fund. The incentive to maintain your SMSF as a complying super fund is to ensure your super fund continues to receive favourable concessional tax treatment.
What are my key responsibilities as trustee?
As trustee of an SMSF you must act in accordance with:
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The provisions of the Superannuation Industry (Supervision) Act 1993 (SISA) and its Regulations
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The SMSF trust deed rules and provisions
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Other rules imposed, for example under Taxation law and Trust law.
What are the SISA ‘Covenants?’
The Superannuation Industry (Supervision) Act (SISA) contains covenants (i.e. rules) that are automatically deemed to be included in the trust deed of every regulated super fund in Australia. These covenants reflect the duties imposed on all trustees under general trust law, and require trustees to:
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Always act honestly
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Exercise the same degree of care, skill and diligence as an ordinary prudent person in managing your SMSF
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Act in the best interest of all your SMSF’s beneficiaries
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Keep the SMSF’s assets and money separate from other money and assets, such as business and personal money and assets
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Retain control over your SMSF
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Develop and implement your SMSF’s investment strategy
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Not enter into contracts or behave in a way that hinders trustees from properly performing their duties or powers
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Allow beneficiaries access to certain information about the SMSF
