2016 budget changes and CGW SMSF trust deeds

With the start date for the 2016 budget changes to superannuation approaching, it is time to consider the action we must take for SMSFs to comply. One very important question is whether current SMSF trust deeds will be appropriate under the new regime.

CGW SMSF trust deeds prepared after March 2007 will still be adequate, but there are benefits in updating now.

New CGW SMSF trust deeds were released on 1 February 2017, and contain a number of enhancements including:

• the deed automatically removes the limitations imposed in a transition to retirement income stream when the pensioner satisfies a full cashing condition;
• the option of including other death benefit control mechanisms such as a death benefit guardian;
• specifically allowing the trustee to comply with the new forms of commutation authorities and excess transfer balance tax, even if they do not have the consent of the member; and
• adding a mechanism to resolve disputes between members so they can exit the fund without consent of the others.

CGW SMSF trust deeds already had a number of important features including:

• a number of options in the death benefit payment provisions, including child pensions and superannuation proceeds trust;
• effective and simple to use binding death benefit nomination and reversionary pension provisions free from unnecessary procedural requirements or restrictions;
• clear priority rules for binding death benefit nominations and reversionary pensions;
• changing the terms of a pension without needing to formally stop and restart the pension, including the ability to alter the reversionary beneficiary (subject to the pension terms);
• clear rules about what an attorney can and cannot do on behalf of a member;
• reserving of contributions and income; and
• allowing segregating investments even for members not in pension phase.

As with everything with SMSFs, it is important to ensure the trust deed will allow you to do the things you want and need to do.