SMSF trustees need to be wary of the conflicting guidance relating to how long they must retain the declaration they signed upon the establishment of their fund and should abide by the rules stipulated in the Superannuation Industry (Supervision) (SIS) Act, according to a specialist superannuation lawyer.
DBA Lawyers director Shaun Backhaus revealed he had heard people state the time period was 10 years, the life of the fund plus 10 years, or as long as it’s relevant and this was often reflected in guidance from professional bodies and regulators.
“Section 104A(2)(c) of the Superannuation Industry (Supervision) Act says the requirement is to ‘ensure the declaration is retained so long as it is relevant, and in any case for at least 10 years’. That is different to the life of a fund,” Backhaus stated in a recent online webinar.
“How long is it relevant? I think it’s fair to say it’ll be relevant as long as the fund exists.
“This [storage and retention] really shouldn’t be such an issue these days because if you’ve signed the declaration, filed it away, you’ve retained it somewhere, and hopefully you can dig it up if you need.”
Backhaus pointed out auditors, advisers and trustees should refer to back to the SIS Act when dealing with this matter as current guidance ran counter to it when it came to the details of the trustee’s obligations.
“The Auditing and Assurance Standards Board which issues information about auditing SMSFs in Guidance Statement 009 contains specific criteria which states auditors should be checking trustees ‘maintain declarations about understanding their duties and keep it for as long as relevant, or at least 10 years’,” he explained.
“That’s just not right, that’s not what the legislation says.
“ATO QC 63436 says you must keep your completed declaration for the life of the SMSF and at least 10 years after your SMSF winds up. That’s not right either.
“The declaration form itself, [which has the ATO code NAT 71089-06.2021] says the following ‘I must ensure this document is retained for at least 10 years or while I remain a trustee or director of the corporate trustee – whichever is longer’. Once again not correct, but probably the closest to the SIS Act.
“While you remain a trustee or director is probably when it’s relevant but there’s a good argument that [the document needs to be kept] for longer than that.
“So, there are a lot of statements flying around, but none of them actually say what the legislation says.”