Significant Events for SMSF Trust Deeds

Effective Date

Event

Impact

December 1992

Introduction of Allocated pensions

Deeds older than this date are unlikely to allow allocated pensions to be paid

1 July 1994

Superannuation Industry (Supervision) Act 1993 replaced the Occupational Superannuation Standards Act 1987

This major reform required almost all SMSF deeds to be updated in order to comply with the new Act

1996-97

Introduction of Lifetime Complying Pensions

Deeds older than this date are unlikely to allow complying lifetime pensions to be paid

16 October 1997

Introduction of Eligible spouse contributions

With the introduction of eligible spouse contributions, there was no longer a need for gainful employment to be satisfied for a eligible spouse who was under 65 - most SMSF deeds required updating in order to allow such contributions to be accepted

20 September 1998

Introduction of Life expectancy Complying Pensions

Deeds older than this date are unlikely to allow life expectancy complying pensions to be paid

31 May 1999

Introduction of Binding death benefit nominations ('BDBN')

Previously, SMSF trustees had a discretionary power as to whether and to whom to pay a member's benefit upon death - all deeds needed to be updated to allow members to now make BDBNs to bind the trustee to pay their benefit to nominated person(s)

8 October 1999

Introduction of Section 17A which includes the member/trustee rules

The member/trustee structure of all SMSFs needed to be reviewed in order to ensure compliance with this section - most deeds required updating in order to ensure compliance

1 July 1999

ATO replaced APRA as the regulator of SMSFs

Certain deeds needed updating to ensure compliance

Mid-2001

Internal roll-overs of super pensions now treated as ETPs and taken into account to RBL purposes

Certain deeds needed updating to ensure compliance and to ensure internal roll-over provisions could be utilised

1 July 2002

Introduction of greater flexibility with regards to contributions and compulsory cashing

Certain deeds needed updating to ensure compliance and to ensure internal roll-over provisions could be utilised

1 July 2003

Introduction of Government co-contributions

Certain deeds needed updating to ensure that government co-contributions can be utilised

11 March 2002

Introduction of Product disclosure statements (‘PDS')

Upon certain events, a PDS is probably required to be issued to members

12 May 2004

Restrictions placed upon defined benefit pensions (‘DBP')

Members now cannot be paid DBPs unless the power to pay them was contained in the deed as at 11 May 2004 – however the deed may be amended to include this power under a transitional provision applicable to members of a SMSF as of this date wanting to commence a DBP prior to 1 January 2006

1 July 2004

Removal of work test for persons under age 65; Changes to work test for persons aged 65-70

Certain deeds need to be updated to ensure that contributions can be made for non-working persons under age 65 and for persons age 65-70 still working

20 September 2004

Introduction of Market Linked Pensions

Deeds older than this date may not allow market linked pensions to be paid

1 July 2005

Introduction of Transition to Retirement regulations allowing a person who has reached preservation age to access their superannuation without having to retire permanently from the workforce

Certain deeds may need to be upgraded to allow a non-commutable income stream to be paid

1 July 2005

Abolition of the superannuation surcharge

Whilst not critical certain deeds have rules relating to the treatment of the surcharge, these rules are now redundant

31 December 2005

Cessation of DBPs in SMSFs

Defined Benefit Pensions can no longer be established after this date

1 January 2006

Introduction of super contributions splitting

Spouse superannuation splitting commenced allowing members to split up 100% of undeducted contributions and 85% of deductible contributions with their spouse

10 May 2006

Limits place on Undeducted Contributions

Undeducted contributions as at the 10 May 2006 have been capped at $150,000 per year for each member. Members can contribute $450,000 in one financial year however the result is that member cannot make any further undeductions for the next 3 years after the said contribution.

10 May 2006

Proposed Relaxation of member benefit cashing rules at age 65

The recent budget announcements proposed that members of superannuation funds do not have to compulsory withdraw their retirement benefits at age 65

1 July 2007

The 2006/2007 Budget Super Reforms are proposed to start

See the ATO publication on A Plan to Simplify and Streamline Superannuation