Firstly, the SIS Act is short for Superannuation Industry (Supervision) Act 1993. It is the legislation that governs superannuation in Australia.
For a superannuation fund to qualify as ’self-managed’, the following conditions must be met:
1. The fund must have less than 5 members.
2. Each individual trustee must also be a member of the fund.
3. Each director of a corporate trustee must also be a member of the fund.
4. Each member of the fund must be either:
- a trustee of the fund, OR
- a director of the body corporate, if the trustee of the fund is a body corporate.
5. No member of the fund is an employee of another member of the fund, unless they are related.
6. No trustee can receive any remuneration from the fund or from any person for any duties or services as trustee.
There are some exceptions to 2 and 3 above regarding sole member funds.
A superannuation fund with only one member is a self-managed super fund if and only if:
1. If the trustee is a body corporate:
- the member is the only director of the body corporate, OR
- the member is 1 of only 2 directors of the body corporate, and both directors are related to each other, OR
- the member is 1 of only 2 directors of the body corporate, and the member is not an employee of the other director.
2. If the trustees of the fund are individuals:
- the member is 1 of only 2 trustees, of whom one is the member and the other is a relative of the member, OR
- the member is 1 of only 2 trustees, and the member is not an employee of the other trustee.
3. No trustee of the fund receives any payment from the fund or from any person for any duties/services performed by the trustee in relation to the fund.
All above information has been sourced from the Superannuation Industry (Supervision) Act 1993 Sect 17A – Definition of self managed superannuation fund.