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.