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Understanding roles and responsibilities in an SMSF

Understand the different roles involved in an SMSF, from members and trustees to auditors and advisers.

In a self-managed super fund (SMSF), members manage their own retirement savings. This means taking on legal and administrative roles within the fund and, where needed, engaging professionals for support or advice.

Each role has different responsibilities under super law. Understanding who does what can help members meet the fund's legal obligations.

  1. Roles within an SMSF
  2. Choosing an individual or corporate trustee structure
  3. When someone can act for a member
  4. Getting help from SMSF professionals

 

1. Roles within an SMSF

Under super laws, an SMSF can have between one and six members. In most funds, members are also the individual trustees or directors of the corporate trustee. The roles overlap, but each has different rights and responsibilities.

Members

Members are the people whose super is held in the SMSF and who may receive benefits from the fund. They have an interest in the fund's assets but don't personally own each asset.

Trustees or directors

Depending on its structure, individual trustees or directors of a corporate trustee will manage the SMSF. These roles are responsible for making investment decisions and making sure the fund meets its legal and tax obligations.

 

2. Choosing an individual or corporate trustee structure

Your trustee structure determines who legally owns the fund's assets and how decisions are made. 

Individual trustee structure

  • Each member acts as a trustee in their own name
  • A single-member fund must have two individual trustees. The second trustee must be a relative or someone who is not the member's employer, unless they are also a relative
  • The fund's assets are held in the names of all individual trustees
  • If a member joins or leaves, ownership records may need to be updated for the fund's assets and accounts   
  • Administrative penalties generally apply separately to each trustee

Corporate trustee structure

  • A registered company acts as trustee, and each member is a director
  • A single-member fund can have one director
  • The fund's assets are held in the company's name as trustee for the fund
  • If a member joins or leaves, the company's records must be updated. The ownership details of the fund's assets generally stay the same
  • Administrative penalties generally apply once to the company

 

3. When someone can act for a member 

Generally, members must also be trustees of the fund or directors of its corporate trustee. In certain circumstances, another person may act as trustee or director in place of a member: 

  • Members under 18: Children under 18 can be members of a family SMSF, but they cannot legally act as trustees or directors. A parent or guardian can act as trustee or director on their behalf until they turn 18
  • Loss of capacity: If illness or injury means a member can no longer make decisions, a person holding an enduring power of attorney (EPOA) may step into a trustee or director role in their place
  • Deceased members: When a member passes away, their executor or estate administrator may act in the trustee or director role until the member's death benefit becomes payable.

Key rule

Where permitted, an appointed legal personal representative (LPR) acts as trustee, or director of the corporate trustee, in place of the member.

4. Getting help from SMSF professionals

Trustees remain legally responsible for the fund, but they may engage qualified professionals to help with administration, compliance, tax and financial advice.

If you're planning to live or spend time overseas, consider how this could affect your SMSF's residency status. An SMSF must meet certain residency requirements to qualify for concessional tax treatment. Consider seeking professional advice before you move.

  • Trustees: Manage the fund and remain legally responsible for it
  • SMSF auditor (mandatory): Checks the fund's finances and compliance each year
  • Administrator or tax agent: Helps with records, financial statements and tax returns
  • Financial adviser: Provides advice about investments, risk and retirement planning

Approved SMSF auditor (mandatory)

Every SMSF must appoint an ASIC-registered independent auditor each financial year. The auditor checks the fund's financial statements, asset values and compliance with super laws. They must tell the trustees in writing about all identified breaches. Breaches that meet the reporting criteria must also be reported to the ATO.

SMSF administrator or tax agent

An SMSF administrator or tax agent can help manage the fund's day-to-day administration and tax obligations. They may prepare financial statements, keep member records, draft trustee minutes and lodge the SMSF annual return with the ATO. Trustees remain responsible for making sure the fund meets its legal obligations.

Licensed financial adviser

A licensed financial adviser can provide advice about the fund's cash flow, investment risk, insurance and retirement planning. They may also help trustees prepare and review the fund’s investment strategy. Trustees remain responsible for the strategy and the fund’s investment decisions.

Key takeaway

Trustees and directors remain legally responsible for the fund, even when they engage professionals to help manage it. They must make sure the fund meets its legal obligations and may be personally liable for some breaches.

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Distributed by Commonwealth Bank

Things you should know

SMSFs are complex and involve legal, administrative and compliance responsibilities. SMSF trustees (or directors of a corporate trustee) are responsible for managing the fund and ensuring it complies with all applicable requirements such as superannuation, tax and trustee obligation.

This article is intended to provide general information of an educational nature only. The information may include general advice but does not take into account your individual objectives, financial situation, needs or tax circumstances, and so you should consider the appropriateness of the advice having regard to your circumstances before acting on it. Where applicable, you should obtain and read the relevant Product Disclosure Statement (PDS) and other important disclosure documents before making a decision about acquiring or continuing to hold a product. You should consider seeking independent professional financial, tax and/or legal advice before making any decision based on this information.

The above information is not tax advice. Taxation laws are complex and subject to change. Commonwealth Bank does not provide tax (financial) advice under the Tax Agent Services Act 2009 (Cth). You should consider seeking independent tax advice from a registered tax agent, accountant or adviser before you make any decisions based on this information.

The information in this article and any opinions, conclusions or recommendations are reasonably held or made, based on the information available at the time of its publication but no representation or warranty, either expressed or implied, is made or provided as to the accuracy, reliability or completeness of any statement made in this article.