Like any other retirement fund, a SMSF (self-managed super fund) is a way of saving for your retirement when you stop working. In contrast to traditional pension or retirement schemes, a SMSF is a “DIY” superannuation fund. This means the members of a SMSF are also the fund’s trustees, which means they run the fund for their own benefit.
A trust deed generally means it is a formal and legal document that outlines the terms of a trust agreement. Therefore an SMSF deed is the deed that sets the terms of the SMSF, for example how it should be managed.
A trust deed is often used when mutual funds are set up as a trust. Information that may be documented includes the powers of the trustee and any restrictions on investment vehicles. As mentioned above, a superannuation fund is a special type of trust, set up and maintained for the sole purpose of providing retirement benefits to its members (the beneficiaries).
Thus, a SMSF deed, also known as an SMSF trust deed is a legal document that sets out the rules for establishing and operating your self-managed super fund. This may include things like the fund’s objectives, investment and risk management strategy, who can be a member and how benefits are paid.
Your trust deed must state the name of the fund including a statement that the fund must appoint a corporate trustee or that the fund’s main purpose is to provide old age pensions. Your SMSF deed should also mention who the other trustees are, how the trustees are appointed, how trustees can be removed from the fund by the powers of the trustees, who can be a member, and finally any details concerning the closing up of the fund.
In addition to complying with the objectives set out in the SMSF deed, your fund also needs to comply with the superannuation laws and other applicable rules and regulations. Together, he SMSF trust deed, and the applicable laws and regulations are referred to as the ‘governing rules’ of your SMSF.
In summary, a SMSF deed is a legal document, so you need to have it prepared by someone qualified to do so. As with most major decisions life, and your retirement plan is certainly a big decision in your life, it is prudent to do your research and consult some industry professionals to give you advice. You may choose to consult a lawyer, a financial planner, a superannuation accountant, an independent SMSF auditor or any other industry specialist to provide this help.