Why you need an up-to-date superannuation fund trust deed (By Victoria Kogan)

 

The Trust Deed for a self-managed superannuation fund (SMSF) is important, as it sets out all the rules for the fund. If it’s not up to date, you may have problems.

The ATO tells you what you can do, what you must do and for what you are responsible as a trustee.

 

Risks of an outdated Trust Deed

The trustee may inadvertently act on outdated powers in their Deed. Conversely, trustees may be unable to exercise certain powers due to a lack of current provisions in the Deed. If this happens, trustees risk incurring audit breaches that could lead to ATO investigations and sanctions.

 

Six reasons to update a Trust Deed

1. Flexible pensions

Many older SMSF Deeds have inflexible pension payment provisions. These will not contain powers that permit SMSF trustees to pay pensions that comply with superannuation law.
 

2. Reversionary Beneficiary Pensions

Old Deeds may not allow for reversionary beneficiary pensions to be paid on a member's death, risking the continuation of a member's current pension to a spouse or child. However, most new deeds will allow Automatic Reversionary Pensions.


3. Transition to Retirement Pensions (TTR)

Under current legislation, TTRs can begin when a member reaches preservation age (i.e., from age 59). Up to 10% of the balance can then be accessed annually. Older Deeds may only allow for a pension to commence once the member has retired or reached the age of 65.


4. Death Benefit Payments

To create certainty about death benefits, a binding death benefit nomination (BDBN) can be put in place, detailing who is to receive your benefits.


5. Commutation Authorities

An updated Deed must ensure trustees have the power to pay various taxes, including the excess transfer balance tax and excess non-concessional contributions tax, even without the consent of the member. This includes the ability to refund excess contributions to the ATO.


6. Six Member SMSFs

According to the latest legislation changes, the definition of an SMSF now requires a maximum of six members (instead of fewer than five). And at least half of the trustees or directors of the trustee company must now sign certain fund and regulatory documents. Your updated Deed should reflect these important changes.

 

knp can help you update your SMSF Trust Deed to protect your interests and to get the most from your SMSF. 

 

VICTORIA JOB FUND


There have been changes made to the Jobs Victoria Fund allowing more businesses (and employees) to be eligible.

 

Victorian employers can now apply for wage subsidies up to $20,000 per eligible employee to help meet the costs of employing new staff.

 

The subsidies introduced aim to encourage employers support and employ those who have been impacted from the pandemic.

 

Broadly, there are four levels of wage subsidies available which range from $5,000 to $20,000 Subsidies are dependent on the number of hours the employee works and whether you are hiring from the priority group impacted by the pandemic. The number of subsidies you can apply for will also depend on the size of your business.

 

Eligibility checklist

To be an eligible applicant you must satisfy all of the following conditions:

 

  • Be an employer operating in Victoria
  • The employee/s employed will be hired for at least 12 months on a permanent or fixed term basis
  • The employee/s work at least 19 hours per week or 8 hours if an exemption applies
  • The employee/s comes from at least one of the priority groups of jobseekers
  • You are the direct employer of the employee/s
  • The employee/s jobs pay the national minimum wage with a salary of less than $120,000 per annum excluding superannuation.

 

Please note the employee/s need to be employed before applying to the Fund.

 

The wage subsidy will depend on the applicant, employee and job eligibility. The full eligibility criteria are outlined in the following link below and click to see if you meet the requirements and have the necessary evidence to support your claim.

 

https://business.vic.gov.au/grants-and-programs/jobs-victoria-fund

 

KnPeople

 

Australia’s Biggest Morning Tea

 

On 25th May, we hosted our own Biggest Morning Tea to raise awareness and funds for cancer research. Knowing that every cup made a difference made the day tea-rrific. We have raised a total of $964. 

  

 

 

 

 

 

Newsletter - June 2022 Edition

 

8 June