New Regulation for SMSF

Self Managed Super Funds

Summary

New regulations for Self Managed Superannuation Funds (SMSF) came into effect 7 August, 2012

The new regulations require the SMSF Trustee to:

  • Regularly review the investment strategy of the SMSF
  • Consider insurance for members – as part of the investment strategy
  • Value assets at market value for reporting

What it means

Regularly review the investment strategy

Whilst this is good practice and a review of the investment strategy is undertaken as a prudent measure, the new regulations now make this a requirement. Periodically reviewing your investment strategy helps to ensure alignment to your goals.

Insurance for Members

Life cover can be an important component of your overall strategy, especially if your SMSF is not in pension stage. Without life insurance, there exists the potential for your fund to be under funded should someone prematurely die. Consideration of the risk of not having life cover within the fund should now be considered when reviewing your investment strategy.

Value Assets at Market Value for reporting

Marking the value of assest in the fund to their market value is a prudent step as although this will impact the balance of member benefits, it will provide a much closer estimate of the value of the assets of the SMSF to the members. Recognition of unrealised (book entry only as nothing has been sold) gains / losses is now a requirement and may involve the need to have assets valued by a registered valuer.

If you have concerns about these new requirements or your particular circumstances, please contact us on (02) 9907 2733 to discuss.