A proposed change to laws regarding who can be appointed as a trustee of an SMSF could allow individuals approved by a state or territory public trustee office to act in that capacity and claim remuneration for doing so, a specialist lawyer has noted.
SuperCentral superannuation special counsel Michael Hallinan said changes to sections 17A and 17B of the Superannuation Industry (Supervision) Act 1993 have been put forward in the Treasury Laws Amendment (Delivering an Efficient and Trusted Tax System) Bill 2026, which was introduced into parliament on 25 March, and address current legal barriers that prevent a public trustee nominee from being appointed.
“For a superannuation fund to qualify as an SMSF, section 17A requires the trustee structure to be either a single corporate trustee or two or more individual trustees,” Hallinan said.
“As the public trustee is a corporation, the public trustee can neither be appointed as a director to the corporate trustee nor can it be appointed as a trustee with other individual trustees. Consequently, section 17A needs to be amended.”
Additionally, the changes to section 17A will expand the exception to the requirement that each member of an SMSF must be a trustee and each trustee must be a member.
Hallinan noted the current exceptions to this rule apply where someone holds an enduring power of attorney granted by the member and where a legal personal representative of a member acts on their behalf after their passing.
“The bill will introduce three further exceptions, namely where the public trustee is the executor/administrator of the estate of a deceased member, where the public trustee is acting as financial manager for a member under a legal disability and where the public trustee is the enduring attorney for a member,” he said.
Appointments as a trustee under these exceptions would only apply in the first case for the period from the death of the member to the cashing out of the death benefit, in the second case for the period of legal disability and in the third while the enduring attorney continues.
SMSFs, however, will retain the ability to reject a nomination made by the public trustee and cannot be forced by it or the ATO to make an appointment.
“The proposed provisions do not impose any duty on the current trustees to appoint the nominee as a trustee,” Hallinan pointed out.
“The proposed provisions confer no power on the public trustee to appoint a trustee. The legislation establishing the public trustee does not confer such power. Consequently, the public trustee cannot itself appoint the approved individual as a trustee.
“The nominee can only be appointed in accordance with the trust deed/governing rules or by being appointed by the court.
“No contravention will occur if the nominee is not appointed by the trustees or members.”
The bill is currently in the lower house awaiting further debate.
Jason Spits
SENIOR JOURNALIST
Jason is a senior journalist with Benchmark Media and writes for the selfmanagedsuper website and magazine and smstrusteenews website. He has covered financial services since 1999 and has written about life insurance, superannuation, investment management and financial advice, in both a freelance and in-house capacity, and also did a brief stint as a media manager for an industry association. He has been the editor of trade titles Money Management and Financial Standard, and was most recently senior journalist with life insurance title Riskinfo.
Articles by Jason