On Thursday 17.6.2021, the Bill that increases the maximum number of allowable members, from 4 to 6, in new and existing SMSFs and small APRA funds, passed both houses of Parliament, without amendment.
See below for further detail.
The Treasury Laws Amendment (Self Managed Superannuation Funds) Bill 2020 awaits Royal Assent after being passed on 17 June 2021 by both Houses without amendment. The Bill will commence from 1 July 2021, provided that it receives Royal Assent by 30 June 2021. (As a matter of interest, this Bill was introduced on 2 September last year and then had a 9 month holiday, until Parliament turned its attention to it again.)
The Bill increases from 4 to 6 the maximum number of allowable members in new and existing SMSFs and small APRA funds. It does this by amending s 17A(1)(a) of the SIS Act to require an SMSF to have fewer than 7 members (instead of fewer than 5) to satisfy the definition of an SMSF.
The rationale given for this is that SMSFs are often used by families, which can often have more than 4 members (para 1.4 of the EM).
An increase in the maximum number of SMSF members will also have implications for the fund’s trustee arrangements as s 17A also requires each member to be a trustee of the fund (or a director of the corporate trustee).
For an SMSF with 3-6 directors or trustees, the Bill also amends s 35B of the SIS Act to require the accounts and statements of the SMSF to be signed by “at least half of” the directors or individual trustees to also satisfy the trustee limit in the State legislation. An SMSF with 1-2 directors or individual trustees must have its accounts and statements signed by all of the directors or trustees.
The Treasurer and the Minister for Superannuation issued a joint media release on 17 June 2021 covering the raft of superannuation legislation passed that day.