Updated insurance & investments requirements for SMSFs – Aug 2012

The ATO has introduced measures on 7 August 2012 which are part of the suite of measures announced within the Stronger Super legislation. These measures are intended to address potential risks and strengthen the regulatory framework in which self-managed super funds (SMSFs) operate. In short, these measures mean that you, as trustee of an SMSF, are required to:

  • conduct a review of the fund’s investment strategy on a regular basis
  • consider insurance for fund members as part of the fund’s investment strategy
  • value the fund’s assets at market value for the purposes of preparing financial accounts and statements

The obligation that you as a trustee of an SMSF are required to keep money and other assets of the fund separate from any money or assets held by you personally or by a standard employer-sponsor or an associated standard employer-sponsor is now a prescribed operating standard. All these measures are prescribed operating standards for the fund, which means you must ensure they are complied with at all times, and the ATO has the power to enforce compliance.

What this means for trustees

During each income year from 2012-13, you should review your fund’s investment strategy to ensure that it continues to reflect the purpose and circumstances of your fund and its members. These reviews should occur on a regular basis and could be evidenced by documenting decisions made in the minutes of meetings held during the income year. You should also consider insurance for members.

Each of the SMSF’s assets should be valued at their market value when preparing accounts and statements for the 2012-13 income year and later years. Accordingly, the first time you will need to ensure compliance with this requirement will be in relation to the 2012-13 income year accounts and statements, where you will need to determine the market value of the assets as at 30 June 2013.

How can we help?

We can assist you with a review of your current investment strategy to ensure that it continues to meet the needs of your changing circumstances and life-stages, and where appropriate we can advise on whether you should be considering insurance for the fund members as part of that investment strategy.

We can also provide you with guidance relating to meeting your compliance requirements to value your fund assets at market value for the 2012-13 year accounts and statements.