A technical specialist has advised SMSF trustees looking to take advantage of the new six-member fund limit to review all signatory protocols that may be required once the change has been made.
SuperGuardian education manager Tim Miller acknowledged trustees wanting to run a six-member SMSF did not have to worry about the requirements regarding the sign-off of the fund’s financial statements as these are covered under section 35B of the Superannuation Industry (Supervision) Act.
To this end, the previous protocols that applied to four-member funds have been extended to cover the increased member limit.
Specifically, the law now stipulates if an SMSF has four members, then at least two of the individual trustees or two directors of the corporate trustee must sign off on the financial statements of the fund. Further, if an SMSF has five or more members, then at least three of the individual trustees or three directors of the corporate trustee must approve the financial statements with their signatures.
“This piece of legislation is exclusively about the financial statements, that is, your profit and loss statement and balance sheet, for the super fund,” Miller said.
“[However] other signing requirements are still subject to audit requirements.
“So I think it’s an important conversation piece to have with your fund auditors with regards to signatory requirements and other [procedures] for funds.
“As we know, a lot of trustee resolutions can be accepted with just the chairperson’s signature so there is nothing that mandates that [all members] have to sign the documents.
“But [for] things like the audit engagement letter and the trustee representation letter, when we’ve had conversations with various auditors, they are still wanting, in that initial communication, to get the acknowledgement from all of the trustees.”
According to Miller, it is a good time to address these issues for the 2022 financial year and beyond so as not to hold up any of the official procedures of the fund, such as the annual audit, when they fall due.
The legislation allowing six-member SMSFs passed through parliament in June.
