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SMSF trust deeds

Trustees of SMSFs are governed by the rules and regulations set out in the Superannuation Industry (Supervision) Act 1993 (SIS Act) and the fund’s trust deed. Trustees need to regularly review the trust deed, as a transaction that is permittable through the SIS Act, may be prohibited according to the trust deed.

Superannuation laws are constantly changing and the trust deed must adequately reflect these laws. To ensure the SMSF is allowed to access strategies permitted by the SIS Act, the trust deed should be reviewed and updated regularly.

If a trustee wishes to use the SMSF for activities such as an investment strategy or pension income stream, the activity will need to be included in the trust deed.

For example, the SIS Act allows a transition to retirement strategy for members over 55, however, the trust deed may only permit a payment when the member reaches the retirement age resulting in the member not being able to access to transition to retirement strategy.

A regular review and update of the SMSF trust deed will ensure the SMSF trustees have access to a range of strategies and activities, whilst also remaining a compliant fund.

Posted on 18 November '15 by , under Super.

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Transition to retirement

The transition to retirement (TTR) strategy allows you to access some of your super while you continue to work.

You are able to use the TTR strategy if you are aged 55 to 60. You can use it to supplement your income if you reduce your work hours or boost your super and save on tax while you keep working full time.

  • Starting a TTR pension: To start your TTR pension, transfer some of your super to an account-based pension. You have to keep some money in your super account so that you can continue to receive your employer's compulsory contributions as well as any voluntary contributions you may be making.
  • Government benefits and TTR: The benefits you or your partner receive might be impacted if you choose to opt for this strategy. How and what exactly will change might become clearer upon discussing this with a Financial Information Service (FIS) officer.
  • Life insurance and TTR: In some cases, the life insurance cover you have with your super may stop or reduce if you start a TTR pension – check this before making any decisions or changes.

TTR can help ease your mind as you transition into retirement but it can be a bit complex. Before you choose whether you want to use TTR to reduce work hours or save on tax, or even if you want to use TTR altogether, you should figure out how this will impact all aspects of your finances.

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