Cutting down to the essentials

Self-managed super funds (SMSFs) are an attractive option for those who want more control over their retirement savings. However, trustees who have run a fund for as long as SMSFs have been in existence (around 20 years) are likely to have accumulated a lot of paperwork, especially if they engaged in various super strategies throughout the years.

Since SMSFs have a statutory obligation to retain certain documents for certain lengths of time, it can be difficult to know what records trustees can afford to cull and continue to satisfy super rules. Another consideration is what information is necessary to provide the ATO so it can calculate any tax due when trustees die and the balance remaining in the fund is to be paid to beneficiaries.

For instance, when an SMSF trustee commences a pension, they are required to prepare trustee minutes which must be kept for ten years. The minutes must be signed and retained as they confirm the terms of the pension being paid to the member.

Records of the major investment decisions and any records that relate to the appointment of fund trustees also need to be kept for ten years. Appointing an enduring power of attorney is another long-term record that must be kept.

A good option for those wanting to cut back on storage requirements is to store documents electronically, as the ATO will accept electronic copies of many super documents. All trustees need to do is scan the papers and save them to a storage facility, like a USB thumb drive.

However, trustees should always keep a paper version for one key document; the fund’s trust deed. Trust deeds formally document the existence of a superannuation arrangement between fund trustees and members, as it outlines the rules particular to a super arrangement. Not having a properly executed copy of a trust deed may create some confusion over what rules apply to the super fund.

Super funds with a pension in place should retain a signed record of the commencement documentation. Other records of investments that are older than ten years old could be disposed of unless they are required to confirm the cost base of assets for capital gains purposes.