According to the ATO the three Rs for SMSFs are Responsibility, Related party transactions and Rules. This was the topic of a speech given by Stuart Forsyth, ATO Assistant Deputy Commissioner for Compliance, Strategy, Risk and Delivery, Superannuation to the Australian Investors Association Annual National Conference 2014.
SMSFs mean taking responsibility for your retirement savings. As Mr Forsyth said in the speech “SMSFs are far from ‘do-it-yourself’ or ‘set and forget”, instead they “require significant time, attention and expertise”.
Mr Forsyth asked that people remember the ATO isn’t a prudential regulator. Prudential regulation “governs the conduct of people and institutions in a position of trust over other peoples’ money”, instead SMSF trustees must be “vigilant in protecting their fund’s assets”.
Mr Forsyth highlighted a number of things SMSF trustees need to consider as part of the responsibility of running an SMSF, the first was succession planning – including binding death benefit nominations, reversionary pensions and enduring powers of attorney.
The SMSF deed also needs to be checked, as it should “reflect the requirements of the fund and be tailored to meet the fund’s objectives and the members’ needs”.
Trustees were also encouraged to “consider the advantages of appointing a corporate trustee” as it would likely result in a “smoother succession”.