In this guide
Let’s face it, we have all lost our purse or wallet at one time or another and know the hassle that this can cause.
Having to contact our bank to cancel and reissue our cards, going through the dramas around getting a new driver’s licence or even just remembering what we had stored in there in the first place.
But what happens if you lose any of the important documents or paperwork for your self-managed super fund? What happens then? Who do you contact? What needs to be done?
There may not be an easy solution in all cases but in this article we will show you what you need to consider and what steps you may need to take.
Record-keeping obligations
There are strict legal requirements around the need for SMSF trustees to keep certain records that relate to their fund. The timeframe for maintaining these records depends on the type of documentation.
For instance, the fund’s accounting records, evidence of transactions, copies of the annual return and transfer balance reports need to be kept for a minimum of five years.
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Whereas more permanent documents, including trustee declarations, trustee consents and minutes of the trustee meetings that take place, all need to be kept for at least ten years.
Other documents, like your SMSF trust deed and the constitution for a corporate trustee, will need to be held for the life of your fund. It is also important that you maintain prior versions of your trust deed so that an ‘evidence chain’ is maintained.
We will talk more about trust deeds shortly.
Failing to maintain the appropriate documentation for the required timeframe can lead to compliance breaches and would usually require the fund’s auditor to lodge an audit contravention report with the ATO.
It is therefore important that, where documents have been misplaced, appropriate measures are taken. Those measures or actions are often dictated by what documents have been lost.
The most common documents that are reported lost include pension documentation, accounting or financial records and the fund’s Trust Deed.
Where to start
We will assume that you have already carried out an extensive search for the lost paperwork, but you have come up empty handed. So where to now?
We would suggest you contact any of the professional service providers that you may have engaged in the past to see if they have copies of the lost documentation.
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Find out moreIn many cases, your fund accountant would have made copies of certain documents for the completion of their ongoing work. This would likely include the fund’s accounting records, annual transactions or even copies of any relevant transfer balance report.
If you use the services of a fund administrator, they may also have copies of the documents that have been misplaced. It would not be uncommon for fund administrators to assist with the preparation of certain fund paperwork, like the establishment of pensions or requests for lump sum payments.
In other cases, the fund’s auditor may have copies of some of the more permanent documents, including trustee minutes and resolutions, pension documentation and trustee consents.
When it comes to your SMSF trust deed, you may have other parties that you can contact in addition to the fund’s accountant, administrator or auditor.
Your bank or financial institution may have requested a copy of the trust deed prior to establishing an account for your fund. They may have taken a copy of the entire deed or sometimes they just take copies of certain pages.
If you have a financial adviser, they will often also maintain a copy of the executed trust deed.
Failing all of the above, you could also consider contacting the initial deed provider, as they may have a copy held on file.
Contacting these professionals or service providers can often prove fruitful.
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Common scenarios
When it comes to missing information and documentation, there are a few scenarios that occur more frequently.
The constitution for a corporate trustee
This is essentially the company’s ‘rulebook’ that outlines the powers and duties of the company directors. It establishes how the company operates and sets out procedures for meetings, voting, and changes to the company.
This document is separate from the SMSF trust deed, which sets out how the superannuation fund itself is managed.
If this document is misplaced, you should first contact your accountant or fund adviser as they may have a copy. Or as mentioned earlier, you could also consider contacting your bank as they may have taken a copy and maintained this on file when you opened your SMSF’s bank account.
The other option you have is to contact a legal professional who may be able to assist by drafting appropriate resolutions or other documentation that can be used to replace the lost constitution. This would usually require sufficient evidence relating to the lost constitution to be produced.
Lastly, you could make an application to the Courts to have a new constitution formally adopted. Once again, you should discuss this with your legal adviser.
Pension documents
Pension documents are another commonly misplaced piece of SMSF paperwork.
Fortunately, these documents are usually prepared or automatically ‘generated’ by SMSF accountants or service providers, so they will often have a copy or be able to reproduce them for you.
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Find out moreIn situations where these documents cannot be reprinted or sourced, it is important that you seek advice that is ‘pension specific.’
It may be that a professional can draft appropriate paperwork, including a deed of affirmation, confirming that there is an existing pension in place and establishing a new pension agreement moving forward.
Seeking specific advice on this is important as the terms of any existing pension need to be ‘reestablished’ moving forward.
Specific issues with lost trust deeds
Of all the documents that can be lost, the fund’s trust deed is usually the most problematic and, unfortunately, one of the most misplaced documents.
We need to keep in mind that the fund’s trust deed not only sets out the governing rules for the fund, but it also defines the terms of the trust. Remember that an SMSF is a trust, where assets are held by the fund trustees for the benefit of the fund members.
The loss of the fund’s trust deed can therefore be extremely detrimental.
Without a trust deed, any action or decision taken by the fund trustees can be called into question. Was that trustee decision actually in line with the fund requirements? Was the transaction entered into in accordance with the fund rules?
There have been many legal cases over the years that have resulted from the loss of an SMSF trust deed, and it is for this reason that you may need to involve a specialist legal adviser.
You may be required to take certain legal steps to ensure that the SMSF can continue.
In some cases, your legal adviser may be able to put in place appropriate documentation to show that the fund (trust) does exist and can continue with this new or replacement documentation.
This will also often depend on what paperwork and evidence you can produce around the initial establishment or maintenance of the SMSF.
In other cases, you may be required to make an application to the Supreme Court for orders to be made about the legal existence of the fund (the trust), which can be an expensive exercise.
This is why you need special legal advice. Their fees may save you from an even more expensive disaster.
The bottom line
If you ever find yourself in the position where you have lost or misplaced your SMSF documentation, it’s important to take action as soon as possible.
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Get advice from a specialist so that the appropriate measures can be taken. The longer it takes to rectify the situation will only increase the risk of further compliance issues and increase the legal risk for the fund’s trustees.
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