SMSF practitioners working with clients who have long-running funds should check the trust deed is compliant with super laws and the trustees understand their duties, particularly where the documents have not been amended for some time, a technical expert has advised.
Accurium SMSF manager Matthew Richardson said funds operating under trust deeds that are more than 20 years old may lack provisions contained in newer documents, including having to declare the trustees understand their obligations under law.
Speaking during a webinar today, Richardson noted SMSF trustees were required to sign the trustee declaration within 21 days of being appointed, however, this requirement did not apply before 1 July 2007, but may do so now where subsequent changes have taken place.
“It is possible that an individual won’t have signed a trustee declaration and that could be fine. This was only a requirement for those appointed after 30 June 2007,” he said.
“So if a fund has been around for more than 17 years, there was no requirement at that point for a trustee to sign that declaration and they wouldn’t have been forced to since.
“Watch out if there is a change of the trust deed, for example, moving from an individual to a corporate trustee. At that point, anyone who hadn’t signed the trustee declaration would need to do that now.”
He also noted the governing rules of much older funds may also run counter to the Superannuation Industry (Supervision) (SIS) Act and Regulations, which were introduced in the early 1990s.
“It is important to remember that even if the trust deed allows it, the SIS Act or Regulations may not,” he said.
“So the governing rules of the fund can be more restrictive than the SIS Act or Regulations, but they can’t be wider than those or make things possible which specifically aren’t under the SIS laws.
“We would expect more recent deeds to not have these sorts of issues, but you never know, and it’s always a good idea to check it now and not in the future when something happens.
“This is especially the case for older funds as the last time the trust deeds were required to be updated by law was 1993 when the SIS Act was introduced.”
