Issue
Whether the superannuation fund qualifies as a self managed superannuation fund for the purposes of section 17A of the Superannuation Industry (Supervision) Act 1993 (SIS Act) if one of the members is not a director of the corporate trustee.
Decision
The fund does not qualify as a self managed superannuation fund.
Facts
The superannuation fund has two members who are husband and wife. The fund has a corporate trustee of which the husband is the sole director. Due to their circumstances it is not possible for the wife to become a director of the company.
The husband and wife are currently in the process of a divorce. Under an order of the Family Court, the wife must remain a member of the fund. Her benefits must be retained in the fund until she is entitled to receive the benefits, at which time they are to be paid to the husband.
Reasons for Decision
Subsection 17A(1) (SIS Act) sets out the basic conditions that must be met by a fund with more than one member in order to be a self managed superannuation fund.
Subparagraph 17A(1)(d)(ii) (SIS Act) provides that if the trustee of the fund is a body corporate, each member of the fund must be a director of the body corporate. Therefore, if the wife remains a member of the fund but does not become a director of the corporate trustee, the fund does not qualify as a self managed superannuation fund. Accordingly, the superannuation fund must be regulated by the Australian Prudential Regulation Authority (APRA).