Is It Time To Update Your Superannuation Deed?

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Insights From MCA Accountants

Is It Time To Update Your Superannuation Deed?


Your SMSF deed contains the “rules” that your SMSF must abide by, and these are in addition to the rules set down by the Law. Often, trust deeds contain rules that mirror the Law at the time the deed was written (for example, many deeds don’t allow SMSF’s to accept Government co-contributions) – which is why deeds need to be updated regularly.


A self managed superannuation fund (SMSF) is technically a special kind of trust that is operated within the bounds of the Superannuation Law.

A trust is merely an agreement between varioius parties (the Trustees) to undertake something, for the benefit of specified people (the Beneficiaries). This agreement should be put in writing (how else do you prove it exists if nothing else) – and this agreement is called a trust deed.

The trust deed specifies not only who the Trustee and Beneficiaries are, but what rules and limitations are in place to (among other things) ensure the fair and equitable treatment of all parties.

As with all aspects of life, an agreements in the trust deed cannot override the Law (for example, you can’t create a deed that allows a Trustee to steal all they money), but you can create a deed that restricts what the Trustee can do (for example, say the Trustee can’t use that money to invest in property – even though it is perfectly legal to do so).

So… a SMSF (and any trust) essentially must abide by BOTH:

  • The Law; and
  • The deed.

In the case where they conflict, generally the most restrictive provision will apply. This effectively means:

  • The SMSF cannot do something that the deed allows, but the Law does not; and
  • Most importantly – The SMSF cannot do something that Law allows, but the deed does not.


Keep that last paragraph in mind for the rest of this article…

Most SMSF deeds are written with clauses around who can be a member, how many members the SMSF can have, when they can access their superannuation, and so on. If your deed was written in the year 2005, then chances are your deed states what the Law was in 2005.

But Laws change…

Any deed written prior to 2021 may state something along the lines of “the SMSF shall not have more than 4 members” because up until recently, SMSF’s were limited to 4 – however as of today, SMSF’s are legally allowed to have 6 members.

Going back to the statement “generally the most restrictive provision will apply” – in this case the Law says 6 is OK, but the deed says 4. Unless you update the SMSF deed, your SMSF cannot have 6 members.

95% of SMSF’s probably have no interest in having 6 members, but think about all the changes to Superannuation Law over the past 3 years, 5 years, 10 years…

If your SMSF acts in accordance with the Law, but goes against the deed, this is a breach of the superannuation rules and can result in your SMSF failing its annual audit and being reported to the ATO.


There is no hard and fast rule because each deed is different. Some deeds say things like “the SMSF can have the number of members allowed by Superannuation Law”, and some say “the SMSF can have 4 members”.

Deeds should be reviewed annually, with a decision made based on what Laws have changed – but if you pushed us for a “rule of thumb”, no longer than every 5 years.


If you’re still not convinced, below are some examples of Law changes that could require your SMSF to update its deed. It’s not an exhaustive list, but hopefully you will get the picture.

As outlined earlier if your SMSF deed states that your SMSF can only have 4 members, then no matter what the Law says – you can’t have more than 4.

If your SMSF deed states your SMSF cannot except more than $25,000 of concessional contributions (which was the cap prior to the 2022 year), then you can’t take advantage of the increased cap of $27,500.

Similar to above, the Law allows people to use “unsused” amounts of their contribution cap in future years – so if you have $0 of super contributions this year, next year you can put in double the amount.

But again, if your SMSF deed specifies an amount, you can’t take advantage of this.

Similar to the contribution cap rollovers, Superannuation Law allows people to contribute 3x their non-concessional cap in one year (and then no more for 3 years). In recent years, the age limit on this has moved from 65 to 67.

But if your deed states 65 is the age limit – no amount of Law changes are going to help you.

When you start a pension from your SMSF, there is a minimum amount you have to draw each year – basically a % of your member balance, which increases as you get older.

During COVID, the Law was changed to halve the %’s that applied.

However, if your deed specified the %’s, then you are stuck with the higher minimum payment amount.

A couple of years ago the Government introduced a cap of $1.6m that can be used to provide pensions to members and the income on this $1.6m is tax-free. Any balances above this remain in “accumulation phase” and attracts tax in the SMSF.

If you run into problems with this cap, you may need to do an internal rollover for the excess to convert it from “pension phase” to “accumulation phase”.

Not all SMSF deeds allow this however – so if your deed doesn’t contain the right clauses, you could be stuck with some ugly tax consequences when your SMSF isn’t complying with the Superannuation Law.

Some SMSF deeds specifically state that your SMSF is not allowed to borrow money, however it is allowed by Law in limited circumstances.

Admittedly an older one (dating back to 2006), but there are still plenty of deeds out there that don’t allow “contribution splitting”.

This is where contributions received for the year by a person are split / moved across to their spouse. Aside from the moral stance of evening out contributions where one spouse works and the other looks after their family, this can be particularly helpful in some tax planning scenarios.

Why miss out on a perfectly good tax planning opportunity?

Another oldie but a goodie… For many many years you were only able to access your superannuation upon “retirement” (along with medical ground and financial hardship), and then the “transition to retirement pension” was introduced allowing people to access a small portion of their superannuation to suppliment their income as they scaled down.

But if your SMSF deed states “retirement”, you can forget about accessing your superannuation before that.

And more speficially, different types of contributions.

Many deeds state who can make a contribution into your SMSF – the actual member, their spouse, and their employer feature heavily here.

But these deed often ignore contributions from other sources (for example the Government co-contribution).

Your SMSF would have a legal liability to return that money… not a great outcome.

Family Law is a complex beast, and changes to this Law also need to be considered.

Under Family Law, in general, superannuation is a “splittable asset” and is split 50/50 (or whatever is decided) upon marriage breakdown.

However… if your deed has clauses that don’t allow these payments to be made, then you are caught between a rock and a hard place.

In the past, there was an age limit where it was compulsory for a person to start drawing upon their superannuation – this was called “compulsory cashing”.

Imaging this. You’ve done a heap of tax planning, got yourself in a situation where you don’t need to touch your superannuation for a few years and it can just sit there in the low-tax environment that superannuation is….

And your accountant says bad luck, you have to draw it out because you didn’t update your deed.

Dealth benefit payments are tricky, not just because of the emotional nature of them.

Some deeds specify what payments can be made (and by exclusion, limit all other types). But when Laws change to say “yes, you can now make a payment to this person”, you want to make sure your deed keeps in line.

There is nothing worse than leaving a problem like this to your surviving family.

Part of estate planning can be to have “death benefit nominations” in place, which are essentially instructions for your SMSF on what to do with your member balance should something unfortunate happen to you.

Some SMSF deeds don’t allow them at all.

More commonly though, they specify they must be re-written every 3 years – except legally they no longer need to be.

Image going to great lengths to ensure that your family are looked after with a detailed estate plan, only for it to be undermined by a SMSF deed that you didn’t update.

Superannuation Law has (over time) changed definitions and standards around what assets your SMSF can purchase, who from, and who they can be leased to – commonly referred to as “in-house assets”.

Where the Law says “you can”, but your deed is still stuck in the stone age – you can find yourself in very hot water with the ATO should you proceed.


If you read this and came to the conclusion that you should update your SMSF deed, then lets act while it’s at the forefront of your mind.

The first thing you will want to know is the cost of updating your deed. You can refer to our SMSF price list for up to date pricing, but at the time of writing this article we can update your deed for $495.

In order to do so, we will need the following information to start with:

  • Name of your SMSF;
  • Details of all members (name, address, DOB, place of birth, phone, email);
  • Details of the trustee (name, ACN if a company, and other details as above);
  • Establishment date of your SMSF;
  • Date of the most recent amendment of your SMFS deed; and
  • Fully signed and dated copy of both the above deeds (original + amended).

If you are a current client, chances are we have most of this info anyway – so the first thing you should do is contact us to let us know you want to update your deed.

We’ll have a look at our info, and we’ll let you know what we need to get it done.

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