If you are thinking about setting up a self-managed super fund (SMSF), there are a few things you need to know. First and foremost, as the trustee of an SMSF, you have several roles and responsibilities. It includes keeping track of the fund’s finances and ensuring that it complies with the relevant legislation.
SMSF Perth provides services to help trustees with all
aspects of running an SMSF. We can help with everything from bookkeeping and compliance to investment strategies and retirement planning.
Who Can Become an SMSF Member and Who Can Be an SMSF Trustee?
SMSF members and trustees have different roles and responsibilities.
As an SMSF trustee:
- Making contributions to your SMSF
- Choosing and managing your investments
- Ensuring your SMSF complies with the super laws
- Keeping your SMSF records up to date
- Providing information to your SMSF trustee
An SMSF trustee control:
- Managing your SMSF
- Make sure your SMSF complies with the super laws
- Keeping your SMSF records up to date
- Providing information to your SMSF members
You can become an SMSF member if you are:
- 18 years of age or over
- Employed or self-employed
- A temporary resident of Australia (with a valid visa)
You can be an SMSF trustee if you are:
- 18 years of age or over
- An Australian citizen or permanent resident
- Not bankrupt
What are the Responsibilities of SMSF Trustees?
SMSF trustees hold responsibilities including managing super fund investments, complying with tax laws, keeping accurate records, and ensuring the fund is secure. They also need to confirm the fund for payment of retirement benefits and the trust deed and relevant laws and regulations. Additionally, trustees act in the interest of members and should consider seeking professional advice when appropriate. As the responsible party for your self-managed super fund (SMSF), it’s necessary to understand the roles and responsibilities of an SMSF trustee.
So, what exactly are the roles and responsibilities of an SMSF trustee? Let’s take a look.
1. The Primary Roles of an SMSF Trustee
- To act in the best interests of the fund’s members
- To comply with the superannuation laws
- To invest the fund’s assets through the investment strategy
- To manage the fund’s administrative and compliance obligations
2. To act in the best interests of the members
- Understand the needs and objectives of each member
- Understand the benefits and risks associated with each investment option
- Keep up to date with changes in legislation and regulations
- Make sure the fund’s expenses are reasonable
3. To comply with the superannuation laws
- Comply with any other relevant legislation, such as tax and corporation law
- Have a written trust deed that sets out the rules for running the fund
- Keep accurate records of all fund transactions
- Prepare and lodge annual returns with the ATO
4. To invest the fund’s assets following the investment strategy
- Monitor the performance
- Understand the investment strategy and make sure it meets the needs of the members
- Review the investment strategy
- Make sure the investments are in line with the strategy
5. To manage the fund’s administrative and compliance obligations
- Comply with the requirements of the SIS Act and Regulations
- Make sure all fund documents are up to date
- Prepare and lodge annual returns with the ATO
- Complete an audit of the fund’s financial statements each year
These are just a few responsibilities of an SMSF trustee. As you can see, there’s a lot involved in managing an SMSF. With the proper knowledge, you can easily manage SMSF and work.
Things to Consider When Choosing an SMSF Trustee
There are a few things to consider when selecting an SMSF trustee and it’s essential to understand the roles and responsibilities of SMSF trustees before making a decision.
- One of the key considerations is whether to appoint a professional SMSF trustee or to go it alone. If you have the time and inclination to manage your SMSF yourself then you will be the trustee. However, if you don’t have the time or knowledge to manage your SMSF, appoint a professional SMSF trustee.
- Another consideration is whether to have a corporate trustee or an individual trustee. A corporate trustee is a company that acts as a trustee for SMSFs. A single trustee is when one or more people are trustees of the SMSF. It has pros and cons to both structures and it’s essential to understand the implications before.
- Once you have decided on the structure of your SMSF, you need to choose who will be the trustees. If you are the sole trustee, you don’t need to worry about this. Be careful if you are choosing a corporate trustee.
- After deciding on the structure and trustees of your SMSF, you need to consider the investment strategy. The investment strategy sets out how the SMSF will invest its funds. The strategy must be written following the SIS Act and must consider objectives, risk profiles, and circumstances. The investment strategy must also consider liquidity, solvency, and insurance needs.
- The final thing to consider is the administration of the SMSF. It includes record keeping, preparing financial statements and SMSF tax returns, and complying with the super laws. You can do it yourself or you can outsource this to a professional SMSF auditor.
Conclusion
As an SMSF trustee, you have several roles and responsibilities. It includes ensuring the fund is obedient with all relevant legislation, keeping accurate records, and maintaining the asset portfolio.
One of the most important aspects of being an SMSF trustee is the trust deed. The trust deed is a legal document that outlines the rules and regulations of the fund, and as such, you must be familiar with its contents. The roles and responsibilities of SMSF trustees are vast and varied. However, by understanding the trust deed and maintaining accurate records, you can ensure the smooth running of your SMSF.
Risk management is vital for SMSF trustees. As the responsible person for your SMSF, it’s essential to understand the risks involved in running an SMSF and how to manage them. There are several risks that SMSF trustees need to be aware of, including investment risk, operational risk, compliance risk, and reputational risk.