Key Rules Governing Self-Managed Super Funds

Purpose of fund

The fund must be managed and maintained by the trustees in accordance with the sole purpose test. For example, the sole purpose of the fund is to provide retirement benefits for members.

Must include a statement that the fund has appointed a corporate trustee or that the sole or primary purpose of the fund is to provide old-age pensions.
It must also set out who the trustees are, how they are appointed, how they can be removed and their powers.

A separate bank account must be opened so that money belonging to the fund can be separate from accounts of the members, the trustees and related employers (employer-sponsors).

The fund must have a medium to long term investment strategy that considers a wide range of investment possibilities such as cash, low risk investments, growth investments and combinations of investment types.
Contravention of the requirement to have an acceptable investment strategy can result in the trustees being fined or sued for loss or damages. The fund can lose its compliance status and, as a resut, its concessional rate of tax.

The assets of the fund are kept separate at all times from those of the members, trustees and related employers.
Each member must have a separate account in the fund.
The fund’s accounting and banking records must be kept entirely separate from those of members/trustees/employers.
All transactions by the fund must be conducted on a strict commercial basis.
The fund must be able to demonstrate that market value has been paid and received on all transactions.

The trustees must keep accounting records that comply with accounting guidelines for true and accurate accounts and provide accurate record of the true financial position of the fund.
Accounting records must be kept for 5 years.
Other records must be kept for 10 years, including minutes of all meetings, records of changes of directors (if corporate trustees) and a paper copy of any returns lodged electronically with the ATO.