Trustees should know fund details

ATO SMSF details

The ATO has indicated it expects SMSF trustees to be across the details of their fund’s costs, investment and returns.

The ATO has emphasised it will not pass judgment on whether SMSF trustees set up a fund, but does expect them to know the details of what is in the fund and how much it costs to operate.

ATO superannuation and employer obligations deputy commissioner Emma Rosenzweig said the regulator did not have a prudential role in regards to SMSFs, but provided information and ensured trustees met their obligations.

“As the regulator our goal is to make it easy for trustees and professionals to get things right and hard not to [get them right],” Rosenzweig said at the SMSF Association National Conference 2022 in Adelaide today.

“This means that a key part of our regulatory stance is ensuring trustees and their advisers have good factual information on which to base their decisions.

“It is not our role to tell an individual that they should or should not set up an SMSF, unless of course they’re disqualified, or how much money they need, how much they should be paying in fees or what is a good investment for their SMSF.

“However, as the regulator, we do think it’s appropriate to tell trustees that they should be capable of knowing their numbers.

“They should be able to work out what level of fees they’re paying and be able to compare those to other options to decide if they are comfortable with them.

“They should also be able to work out the rate of the return that their SMSF achieves to ensure it is in line with their investment strategy and meeting their retirement goals and they are comfortable with how that compares to other options.

“Whether these numbers are good or bad is not for the ATO to decide, but we wouldn’t be doing our job as the regulator if we didn’t tell trustees that they should know their numbers.”

She said this expectation extended in part to SMSF advisers who could help new trustees develop an understanding of what was required as a trustee.

“As professionals, you should also ensure that your clients know how to make these calculations so that they can make good informed decisions about the best options for them,” she said.

“Our research shows that many trustees need good clear information about these obligations and that there is a huge opportunity in the first six months [for new trustees] to help them establish good habits.”

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