Have you overlooked your requirements as a trustee of your own Self-Managed Super Fund?
Rules and regulations surrounding the management of superannuation funds are constantly changing and evolving. Changes to the Superannuation Industry (Supervision) Regulations Act in 2012 requires trustees of self-managed super funds (SMSFs) to consider whether insurance cover should be held by the fund on the lives of the members and it also requires that the decision be regularly reviewed as part of the review of the fund’s investment strategy.
This change in policy came after a 2010 Super System Review Panel found that only 13% of SMSFs actually have insurance. Although this number seems quite low, there are a few good reasons as to why a SMSF member would opt to not have insurance. The majority of members are over 55 and have a high super balance with low personal debt, which makes their need for any insurance almost negligible.
This change in regulations does not require SMSF member to take out insurance, it merely requires the trustees to consider the issue. In order to prove that they have considered the issue, trustees will be required to prepare minutes/resolutions which;
- Acknowledge that the trustees are aware of the obligation to consider insurance cover;
- Show that the trustees have considered the need for insurance cover for each of the members of the fund;
- Document that they have implemented cover where possible to meet those needs of the individual members of the fund itself (in the case of LRBA) or
- Acknowledge that the trustees have determined that insurance is or is not required for a particular member(s)
Everybody’s situation is different and MWL’s integrated approach to your financial needs and obligations allows us to provide the best advice possible. Our Insurance experts and SMSF experts can work together to figure out what insurance plan, if any, works best for you. Speak to one of our experts today to make sure you’re getting the most out of your super, and fulfilling your obligations as a SMSF Trustee.