Who regulates a SMSF?
Self Managed Super Funds offer heaps of benefits for the fund trustees however, as a trustee, you are solely responsible for your super fund. That’s why it is very important to know the rules and regulations governing the operation of a SMSF. The failure to comply with the rules can lead to fines and even disqualification as a trustee. In this article, we will discuss the agencies regulating SMSF, rules associated with SMSF, and the role of ATO.
Who regulates a SMSF?
The laws are set by the Australian government and self-managed super funds are regulated by the following government agencies:
- Australian Taxation Office (ATO) - The ATO administers the tax system and manages the SMSF as per the SIS Act.
- Australian Securities and Investments Commission (ASIC) - The role of ASIC is to regulate financial services like investments, super, insurance. It also enforces laws to ensure fairness and honesty in Australian companies, financial products, services, and markets.
- ASIC and ATO work in collaboration with each other to regulate SMSF.
Legislations governing SMSFs
- Superannuation Industry (Supervision) Act 1993 or SIS Act
- Superannuation Industry (Supervision) Regulations 1994
Rules associated with operating a SMSF
There are several rules associated with SMSF and failure to comply with the rules can lead to fines, disqualification as a trustee, and lead to your fund to become a non-complying fund.
- The SMSF needs to pass the sole purpose test, i.e., it is to be set up for providing retirement benefits to members.
- The trustees of the fund cannot lend the funds of the SMSF to other members or their relatives.
- Borrowing money is prohibited except under special circumstances.
- The members cannot get early access to funds unless they meet the condition of release.
Role of ATO in managing a SMSF
As a regulator, the ATO performs the following functions when it comes to the regulation of SMSFs:
- Provides information to help you decide if a self-managed super fund is right option for you or not.
- Provides information necessary to set up the super fund, and the role of the trustees.
- ATO will also provide your SMSF with TFN, ABN, and register you for GST if required.
- Ensure the fund is set up for the purpose of providing retirement benefits to the members.
- Ensure the fund is compliant with the super laws.
- Ensure the rollovers and contributors are compliant with the laws.
- If the fund doesn’t comply with the laws, ATO can make your fund a non-complying fund, disqualify the trustees and even prosecute.
- Provides information on investment strategies and restrictions.
- Ensures SMSF auditors are performing their duties.
Note: ATO doesn’t provide investment advice, resolve disputes between the trustees, or recommend SMSF auditors.
If you have set up your SMSF and need help in managing it and ensuring that you are complying with the rules, we recommend you seek the advice of an experienced SMSF adviser.
Bottom Line Control for SMSF help & advice
Whether you need help setting up a SMSF or managing it, our expert SMSF advisers can provide you with strategic advice. Our specialist SMSF service can help you manage your super fund investment decisions and comply with the relevant super and tax laws.
Talk to our Sunshine Coast SMSF advisers on (07) 5471 7077 or complete our online appointment request form today.
