SMSF - Minute to Insure The Members

Insuring the Members of Your Super Fund

What is a SMSF?

A SMSF is a special purpose trust into which individuals and employers can pay a person’s superannuation. It has particular tax and asset protection status under Australian law that is designed to encourage people to save for their retirement. The fundamental rules that apply to a SMSF are no different to those that apply to large public offered or Government superannuation schemes. The essential difference is expressed in its name; self managed superannuation fund. It is an investment structure that is operated by its members.

A SMSF consists of 1 to 4 members, all of whom are trustees of the Fund or are directors of a company that acts as the trustee. Even though a SMSF is operated by its members, you may require assistance from an Accountant or Adviser for the administration of the Fund. You will also need to have the Fund’s financial accounts audited each year.

What is the purpose of this minute?

The purpose of this minute is to consider, and if thought appropriate, insure the members for Life Insurance and/or Total & Permanent Disability Insurance and/or Income Protection Insurance.

Why do I need these Minutes?

It is best practice to have the decision to insure the members formally minuted. These Minutes achieve that. They are in line with the Australian Taxation Office's desire for proper compliance.

What is Life Insurance?

Life Insurance is a policy that will pay money to the owner of the policy on the death of the life insured.

What is Total / Permanent Disability Insurance?

Income Protection Insurance provides regular money to the owner of the policy in case the insured person suffers a disability that stops them from being able to earn income. For example, if you were injured in a car crash and suffered injuries that will with time improve and mend but you are not able because of those injuries to attend to your important income earning duties.

WARNING

If you fail to keep a record of minutes the Australian Taxation Office may state question whether your fund is non-complying and may at the least seek to impose a penalty. Failure to retain minutes is a strict liability offence. A non compliant fund is not entitled to any tax concessions and is taxed at the highest marginal tax rate and particularly suffers significant taxation in the first year of becoming non compliant.

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Fund Name
• The Name of your SMSF
• What is the purpose of this Minute?
• What will I get after I purchase this Minute?
• Do anything else after this Minute is completed?
• Who is allowed to prepare these Minutes?
Trustee Type
• Why do you want to know this?
Company Trustee
• What is an ACN?
• What if I don't know the company ACN?
• Who are the directors of the company?
• What if I have less or more than 4 directors?
Human Trustee
• What if I have more than 4 trustees?
• What is the minimum number of trustees?
Meeting Place
• What is a meeting address?
• Does the meeting need to take place anywhere in particular?

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Fund Name

• The Name of your SMSF

  Please put down the name of your Self Managed Super Fund.
  
  For example:
  
  George Smith Superannuation Fund
  

  This hint is provided by Law Central Legal.

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• What is the purpose of this Minute?

  The purpose of this Minute is to formally consider, and if it is felt appropriate, to resolve to insure the members of your Self Managed Super Fund for Life Insurance and/or Total & Permanent Disability Insurance and/or Income Protection Insurance.
  
  This is best practice. It lets the Australian Taxation Office know that you are doing everything correctly - to the letter.
  

  This hint is provided by Law Central Legal.

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• What will I get after I purchase this Minute?

  You receive the formal Minutes of the Trustees resolving to insure all members for Life Insurance and Total / Permanent Disability Insurance.
  
  All you then need to do is get the Trustee to sign the Minutes and put the Minutes in your file.
  

  This hint is provided by Law Central Legal.

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• Do anything else after this Minute is completed?

  No, you do not need to lodge these Minutes with any government body. All you need to do is get the Trustee to sign the Minutes and put the Minutes in your file. Then start looking for an insurer.

  This hint is provided by Law Central Legal.

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• Who is allowed to prepare these Minutes?

  Anyone is allowed to prepare these Minutes.
  
  However, the trustees of the Self Managed Super Fund approve the Minutes.
  

  This hint is provided by Law Central Legal.

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Trustee Type

• Why do you want to know this?

  You can have your company as Trustee of your Self Managed Super Fund. Or, you may have kept it simple and just had all the members as the Trustees.
  
  It makes no difference to the Minutes.
  
  Just let us know by answering the question:
  
  "yes" I have a company
  "no" just us members (humans) are the trustees
  

  This hint is provided by Law Central Legal.

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Company Trustee

• What is an ACN?

  An ACN is an "Australian Company Number" this is a special unique number identifying the company.

  This hint is provided by Law Central Legal.

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• What if I don't know the company ACN?

  You can do a free simple search at www.asic.gov.au by typing your company name.

  This hint is provided by Law Central Legal.

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• Who are the directors of the company?

  The Directors of the Trustee Company are usually the members of the Self Managed Super Fund.
  
  Only in special situations are the directors and members different. For example, sole member funds and members who are minors have different trustees and members.
  
  The number of Directors is limited to a maximum of 4 for a Self Managed Super Fund.
  

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• What if I have less or more than 4 directors?

  If you have less than 4 directors then leave the other sections blank.
  
  If you have more than 4 directors then you are not a Self Managed Super Fund. Different regulatory requirements apply to other funds. This minute is only suited to self Self Managed Super Funds.
  

  This hint is provided by Law Central Legal.

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Human Trustee

• What if I have more than 4 trustees?

  If you have more than 4 trustees then your fund is not a Self Managed Super Fund. Different regulatory requirements apply to other funds. This minute is only suitable for Self Managed Super Fund.

  This hint is provided by Law Central Legal.

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• What is the minimum number of trustees?

  You must have at least 2 trustees to oversee a Self Managed Super Fund.
  
  What if my fund is a single member fund?
  
  You still must have at least 2 trustees. One of the trustees is you. The other trustee must either be your relative OR the other trustee must not be your employer.
  

  This hint is provided by Law Central Legal.

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Meeting Place

• What is a meeting address?

  The meeting address is the actual address of where the trustees or directors meet to discuss the Minutes.
  
  It can be your office, your home or a public place.
  

  This hint is provided by Law Central Legal.

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• Does the meeting need to take place anywhere in particular?

  The meeting may be held in any location.

  This hint is provided by Law Central Legal.

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This document has been prepared by the law practice Law Central Legal

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