Responsibilities of SMSF Trustees
Whilst there are significant benefits associated with establishing a SMSF, there is also significant responsibility which should be considered before setting up your SMSF.
- Responsibility for the ongoing compliance, administration and decision making for your fund;
- The need to maintain your knowledge of investments and legislation surrounding SMSFs;
- The potential for poor performance if your money is not managed wisely;
- The potential for non-compliance in your fund.
Before the Set Up
As a trustee, you willingly take on the responsibility of running your fund. Basic responsibility includes –
- Deciding who the fund members are
- Establishing the trust and Trust Deed,
- Setting up a bank account
- Registering the fund with the Australian Tax Office or ATO
- Creating an investment strategy
- Creating a plan on when the SMSF end.
However, this is only the beginning. There are more responsibilities to follow once you are able to set up the fund.
After the Set Up
Once you’re set up, here are the responsibilities you need to take –
- Rolling over an existing super
- Organizing employer contributions
- Accepting contributions from other members, which must be within limits
- Making legal and legitimate investments
- Regularly reviewing investment strategies
- Documenting and maintaining the fund’s records for up to 10 years
Yearly Responsibilities of a Trustee
That doesn’t end there. Aside from the basic and follow up responsibilities as a trustee, you also need to do the following every year –
- Value assets
- Prepare accounts and financial statements
- Lodge an annual income tax return and superfund annual return including members’ statements
- Appoint an approved SMSF auditor to audit the fund annually
- Comply with investment requirements
- Pay the self managed super fund levy and any tax dues.
Making Super Payments
In making super payments, the trustee should –
- Decide if any assets can be sold
- Make sure that minimum payments are made every year
- Appoint actuary when necessary
- Withhold tax
- Provide Summary of Payments to other members and the ATO
After the SMSF
Once the fund is finished, a trustee must do the following –
- Get a final audit
- Lodge a final return
- Pay remaining outstanding taxes
- Pay out or roll over the assets
As a SMSF Trustee, you are legally responsible for ensuring your super fund complies with SIS legislation and the super fund trust deed. These rules bind you to:
- Act honestly in all matters concerning the fund;
- Exercise the same degree of care, skill and diligence as an ordinary prudent person in managing the fund;
- Act in the best interests of all fund beneficiaries;
- Keep the money and assets of the fund separate from other money and assets (for example your personal assets);
- Retain control over the fund;
- Develop and implement an Investment Strategy;
- Not enter into contracts or behave in a way that hinders trustees from performing or exercising their functions or powers; and
- Allow members access to certain information.
People who willingly do the wrong thing in their SMSF face imprisonment and there are significant penalties associated with non-compliance in a SMSF. However, these can be minimised by appointing a SMSF Specialist Administrator and developing a sound investment strategy with your Investment Adviser.