A number of changes to superannuation legislation have recently come into force.
One such change requires the trustees of a self-managed super fund to consider, as part of the fund’s investment strategy, whether the fund should hold a contract of insurance that provides insurance cover for one or more members of the fund (regulation 4.09(2)(e) of the Superannuation Industry (Supervision) Regulations 1994). Additionally, the said investment strategy must now be regularly reviewed. Accordingly, we suggest that trustees promptly review their investment strategy to ensure it complies with the current regulations.
Unlike the new requirements above which have not previously been part of the superannuation legislation, a second change has altered the status of an already existing rule. Section 52(2)(d) of the Superannuation Industry (Supervision) Act 1993 required a trustee of a self-managed super fund to keep money and other assets of the fund separate from any money or assets held by the standard employer-sponsor or its associate as well as from any money or assets held by trustee personally. This rule which was previously a covenant is now an operating standard (regulation 4.09A of the Superannuation Industry (Supervision) Regulations 1994). This means that the ATO can now penalise trustees and/or the fund if this rule is breached.
The third change has come in the form of a requirement to value fund assets at market value when preparing financial statements for a self-managed super fund for the year 2012-13 and any later years (regulation 8.02B of the Superannuation Industry (Supervision) Regulations 1994). Valuing fund assets at market value has been the ATO’s preference for a number of years. However, only now it has made its way into the superannuation legislation.