Self-managed superannuation funds (SMSFs) are still breaching the rules, but the number of transgressions they commit has narrowed, according to data collected by Partners Superannuation Services.
The data, released today, is based on the company’s annual audit of around 500 funds throughout Australia and identified two major areas of transgression on the part of SMSFs — making personal loans to members and exceeding the 5 per cent limit on “in-house assets”, including making loans to businesses owned by superannuation fund members.
Commenting on the data, Partners Superannuation director Martin Murden said that in previous surveys the nature of key violations had been much broader and included the problem of not keeping fund and personal assets separate, not having investments in the name of trustees and not appointing all fund members as trustees or directors.
He said that while it was disappointing that violations continued, it was pleasing to note that the type of key violations had narrowed significantly.
“Clearly, more fund trustees are making a much greater effort to truly understand what is expected of them in their roles,” Murden said.
He said with respect to the issue of making personal loans to members, the amount involved was typically under $50,000.
Murden said the common reason for committing such a breach was the need for quick cash and he believed trustees should keep the super chequebook hidden so there was no risk of temptation.
He suggested that trustees prevent other breaches by avoiding using the fund for business finance.