Trust Deeds

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Why Upgrade to the OzPlan Trust Deed?
Should your self-managed superannuation fund have a corporate trustee or individual trustees?

A SMSF begins with a Trust Deed or Rules. The Rules are the foundation of the fund and they govern what the trustee is authorised or prohibited to do. The superannuation laws require the trustee, an adviser, the auditor and any other person advising the trustee on a transaction of the fund to ensure that any transaction undertaken by the trustee complies with the Rules.

The strategic features of our SMSF trust deed include:

An intelligent membership clause that allows anyone to join the fund
Contributions allowable in line with prevailing superannuation laws
Wide range of pensions including the ability to run a combination of pensions
Flexible succession planning
The ability of the trustees to create and run various reserve accounts
The ability of trustees to take advantage of new contribution splitting provisions
The ability to take advantage of the ‘transition to retirement strategy’ which allows fund members to access their benefits at age 55 in the form of a non commutable pension whilst still working.

SMSF Trust Deed (pdf 380kb)
SMSF Change of Trustee (pdf 585kb)
SMSF Change of Fund Name (pdf 404kb)

Trust Deed Upgrades

There has been a vast array of legislative changes to superannuation laws over the past five years. These changes have included changes to membership laws, contribution rules and investment rules including those relating to in house assets.

If the trust deed of a fund is outdated then trustees may not be able to access the benefits of changes in legislation unless they obtain a trust deed upgrade. This may mean that trustees are unable to legally access some key SMSF strategies available including those relating to reserving, contributions, estate planning, retirement and contribution splitting.

SMSF Trust Deed Upgrades (pdf 395kb)

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Why Upgrade to the OzPlan Trust Deed?

Compliance with Current Legislation

The superannuation laws, like all laws are complex and constantly changing. This makes it virtually impossible for trustees of their own SMSF to have peace of mind that the activities they undertake in their fund are in accordance with those laws.

The governing laws of a SMSF are contained within the trust deed or rules of the fund and the deed or rules must adequately reflect these laws and also allow the many strategies available to members of these funds.

The OzPlan trust deed is regularly updated to cater for changes to the super laws so that SMSF members do not miss out on any strategic opportunities.

Comprehensive PDS Including DVD

OzPlan’s PDS Solution is provided in three components so as to provide a greater level of disclosure:

A general information memorandum at the front of the trust deed and rules;
Plain English explanations for most rules inside the trust deed; and
A DVD presentation of the product disclosure information.

Given that the trust deed governs the strategies an Adviser can implement on their client's behalf, it is important that you and the trustee are able to understand the provisions of the deed. The trust deed is practical and strategic yet easy to read. Whilst its primary function is to govern the activities of the fund in accordance with the relevant laws, it also acts as an educational tool for the trustees of the fund empowering them with greater knowledge of the operation of their fund.

Tax Deductible Expense for the Fund

As a general rule, costs incurred by a trustee of a superannuation fund in amending the fund's trust deed are not a deductible expense. However, if the trust deed amendments are necessitated by changes in Government regulations the costs incurred are a deductible expense for the fund (ATO Tax Ruling 2672).

Upgrading a trust deed to satisfy the trustee's PDS obligations under the Corporations Act 2001 or any of the other recent legislative changes will be a deductible expense for the fund.

Professionally Packaged and Delivered

Your new super fund deed is packaged in its own folder with two bound copies of the super fund trust deed, the amending documentation and a DVD. Also included is a copy of the Commissioner of Taxation's book “It’s your money…but not yet” to further assist in your education as trustee of your own SMSF.

We retain a permanent copy of the deed for reproduction if the originals are misplaced. A special fee will apply.

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Should your self-managed superannuation fund have a corporate trustee or individual trustees?

A self-managed superannuation fund (SMSF) can either have a corporate trustee or individual trustees.

A SMSF can have up to four members, and the members must be the same as the individual trustees (or the same as the directors of a corporate trustee).

We generally recommend that a SMSF have a corporate trustee, rather than individual trustees. The major disadvantage of a corporate trustee is the up-front cost of establishing the company. However, there are longer-term benefits of establishing a company, which generally outweigh the extra costs. These benefits can be summarised as follows:

CORPORATE TRUSTEE	INDIVIDUAL TRUSTEE
Continuous succession A company has an indefinite life span; in other words, it cannot die. Therefore, a corporate trustee can make control of a SMSF more certain in the circumstances of the death or incapacity of a member.	Ceases upon death If the SMSF has individual trustees (e.g., a mum and dad SMSF), then timely action must be taken upon the death of a member to ensure the trustee/member rules are satisfied. (SMSF rules do not allow a sole individual trustee/member SMSF.)
Administrative efficiency When members are admitted to, or cease, membership of the SMSF, all that is required is that the person becomes, or ceases to be, a director of the corporate trustee. The corporate trustee does not change as a result. Therefore, title to all the assets of the SMSF remains in the name of the corporate trustee.	Extra and costly paperwork To introduce a new member to a SMSF with individual trustees requires that person to become a trustee. As trust assets must be held in the names of the trustees, this will require the title to all assets to be transferred to the new trustees when a member is admitted to or exits the fund.
Lump sums and pensions A SMSF with a corporate trustee can pay benefits either as pensions or as lump sums.	Lump sums only payable on commuting pension The SMSF rules require that a lump sum can only be paid by commuting a pension, which gives rise to extra paperwork. You cannot simply pay a lump sum benefit.
Sole member SMSF You can have a SMSF where one individual is both the sole member and the sole director.	Sole member SMSF A sole member SMSF must have two individual trustees.
Greater asset protection As companies are subject to limited liability, a corporate trustee will provide greater protection where a party sues the trustee for damages.	Less asset protection If an individual trustee suffers any liability, the trustee's personal assets may be exposed.
Estate planning flexibility A corporate trustee ensures greater flexibility for estate planning, as the trustee does not change as a result of the death of a member.	Extra administration and costs The death of a member requires a change of trustee, and this gives rise to considerable administrative work and costs at an inopportune time.

Please carefully consider setting up the correct structure from the beginning, as significant costs and administrative effort is involved in any future change of trustee.

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