Self managed superannuation fund (SMSF) trustees are mainly failing their legal obligations in two key areas, a survey has found.
Trustees still make loans from the fund to members and exceed the 5 per cent limitation in “in-house” assets, a survey by Partners Superannuation Services has revealed.
Most of the loans made to members were for amounts less than $50,000 and were caused by a lack of separation between fund assets and personal assets, the survey found.
“Often this means grabbing the first available chequebook which periodically is the super fund chequebook. In most cases the trustees are not aware that they can’t borrow from the fund,” Partners Superannuation Services director Martin Murden said.
In regard to exceeding the 5 per cent limit, trustees seemed to be aware of their ability to lend money or lease assets to related parties, but were not aware of the size limit placed on these transactions.
On average one in every 12 SMSFs had committed a trustee breach.
The results coincide with the release of the SMSF Professionals’ Association of Australia’s (SPAA) governance submission to the Federal Government.
The body has rejected the notion of mandated training standards for trustees, but has called upon the government to get behind self-regulation of the industry.
In addition, the industry body has asked for simpler legislation for SMSFs and has raised its concerns over the inequality of penalties for trustees when they breach the law.
Finally in response to the Minister for Superannuation and Corporate Regulation Nick Sherry’s declared focus on investigating over selling of SMSFs, the association believes more work needs to be done in identifying the mature of the aggressive marketing being used.
