What is the proposed change?

Currently before Parliament is a bill which will amend the Superannuation Industry (Supervision) Act 1993 (“SIS Act”) to permit an individual – the nominee – approved by the Public Trustee of a state or territory to act as a trustee (or a director of a corporate trustee) of a self managed superannuation fund. The individual could be but need not be an employee of the Public Trustee.

Such a nominee could be appointed in three situations.

Additionally, the nominee would be entitled to claim reasonable remuneration for acting as a trustee or director.

How is the proposed change being implemented?

The proposed change is set out in Treasury Laws Amendment (Delivering an Efficient and Trusted Tax System) Bill 2026, introduced on 25 March 2026 (Schedule 3, Part 2 items 2 to 5). If enacted, these changes will apply from the next day after the Bill receives Royal Assent.

The Bill will amend sections 17A and 17B of the Superannuation Industry (Supervision) Act 1993. Section 17A specifies the definition of “self managed superannuation fund” while section 17B specifies when a trustee is permitted to be paid remuneration from the fund.

The following paragraphs will consider the details of the proposed change, whether the SMSF must accept the nominee as a trustee/director, who appoints the nominee, who pays for the nominee and what role does the nominee have in the SMSF. For ease of reading, the following paragraphs will deal with the nominee acting as a trustee. Where special issues arise in relation to the nominee acting as a director of the corporate trustee – these will be noted.

Why are the changes being made?

For a superannuation fund to qualify as a self managed superannuation fund, section 17A requires the trustee structure to be either a single corporate trustee or two or more individual trustees. Unlike private trusts, a self managed superannuation fund cannot have a mixed trustee structure – that is having a combination of individual trustees and corporate trustees.

As the Public Trustee is a corporation, the Public Trustee can neither be appointed as a director to the corporate trustee nor can it be appointed as a trustee with other individual trustees.

Consequently, section 17A needs to be amended.

Section 17B imposes a prohibition on trustees of SMSFs being remunerated from the fund for their services as trustees. However, the section allows (subject to certain safeguards) trustees to be remunerated from the fund for the provision of non-trustee’s services (such as legal or accounting services).

As the nominee will be permitted to charge for their services as trustee (subject to certain safeguards), it was necessary that section 17B be amended.

What changes are being made to Section 17A of the SIS Act?

The basic requirement of section 17A is that each member of the superannuation fund must be a trustee and each trustee of the superannuation fund must be a member. A corresponding requirement applies to funds with a corporate trustee.

In the case of single member funds, the single member must be a trustee and there must be a second trustee. Where the single member fund has a corporate trustee, then a second director may, but need not, be appointed.

There are specific exceptions to the basic requirement. One exception is where another individual can act as trustee in lieu of the member being a trustee. This exception applies if the individual holds an enduring power of attorney granted by the member.

Another exception is where a member has died (and therefore ceased to be a trustee), and the death benefit has yet to be allocated and cashed out. During this period the legal personal representative of the deceased member (that is the executor or administrator of the estate of the deceased member) may act as a trustee.

Without these exceptions the enduring attorney or executor/administrator acting as a trustee would not satisfy the basic requirement and the superannuation fund would cease to be a self managed superannuation fund and become a registrable superannuation fund subject to APRA and ASIC licensing requirements and regulation.

The bill will introduce three further exceptions; namely where the Public Trustee is the executor/administrator of the estate of a deceased member; where the Public Trustee is acting as financial manager for a member and where the Public Trustee is the enduring attorney for a member.

The first exception is where the member has died and the Public Trustee is the executor/administrator of the estate of the deceased member. In this exception, an individual approved by the Public Trustee may be appointed as trustee of the fund in the period from the death of the member to the cashing out of the death benefit. This exception is provided by proposed section 17A(3)(aa).

The second exception is where the member is under a legal disability (such as mental incapacity or being under age 18, but not legal disability due to insolvency or being disqualified) and the Public Trustee has been appointed under a state or territory law to manage (to any extent) the member’s estate, property or financial affairs. In this case, an individual approved by the Public Trustee can act as a trustee for the period of the legal disability. This exception is provided by proposed section 17A(3A)(a)(i).

The third exception is where the member has appointed the Public Trustee as his or her enduring attorney and an individual, approved by the Public Trustee, acts as trustee in lieu of the member while the enduring attorney continues. This exception is provided by proposed section 17A(3A)(a)(ii).

Who can be approved by the Public Trustee to act as a trustee of an SMSF?

The individual could be, but need not be, an employee of the Public Trustee. The individual must be “appropriately qualified” and, also, must hold “all necessary licences to perform their duties or services as the trustee or director (as the case may be)”.

The term “appropriately qualified” is not defined in the Bill. Presumably, the qualification need not be formal qualification in law, accounting or financial planning but could be a qualification gained by relevant professional practice or experience. The possession of formal qualifications may be relevant but need not be determinative.

The term “all necessary licences” is also not defined in the Bill. Is acting as a trustee of a self managed superannuation fund for reward providing a financial service? Clearly, the individual acting as a trustee of a self managed superannuation fund cannot be involved in providing a “superannuation trustee service”, as this term only applies to registrable superannuation entities (which do not include self managed superannuation funds). Ideally, the financial services provisions of the Corporations Act should be amended to place the position beyond doubt.

What is the nature of the “approval”?

The approval must be in writing. Presumably, this means that the Public Trustee (or an authorised agent of the Public Trustee) must sign a written instrument which identifies the individual who is to be the nominee, identifies the self managed superannuation fund and identifies the relevant member or the superannuation interest (of the deceased member) in respect of whom the individual will act as trustee.

Who appoints the approved individual?

The proposed provisions confer no power on the Public Trustee to appoint a trustee. The legislation establishing the Public Trustee does not confer such power. Consequently, the Public Trustee cannot itself appoint the approved individual as a trustee.

The nominee can only be appointed in accordance with the trust deed/governing rules or by being appointed by the Court. Typically, the trust deed/governing rules confers the power of appointment on the current trustees or upon the members.

In the case of corporate trustees, the appointment of a director is, depending on the constitution of the company, usually done by a board resolution or a resolution of the shareholders in a general meeting.

Must the nominee be appointed?

No. All the proposed provisions do is to ensure that the appointment of the approved individual will not prejudice the status of the superannuation fund as a “self managed superannuation fund”.

Importantly, the proposed provisions do not impose any duty on the current trustees to appoint the nominee as a trustee.

If the nominee is not appointed is there a contravention of the SIS Act or SIS operating standards?

No contravention will occur if the nominee is not appointed by the trustees or members.

However, if the member is under a legal disability and the only person authorised to act on behalf of the member is the Public Trustee then, appointment of the nominee may be necessary to ensure that the superannuation fund retains its status as a “self managed superannuation fund” and the trustee can still operate.

Can the ATO force the trustees/members to make the appointment?

While the Australian Taxation Office (in its capacity as regulator of SMSFs) has the power (refer s133 of the SIS Act) to remove a trustee, this power can only be exercised if the trustee is disqualified or if the trustee is engaging in conduct that may result in the financial position of the SMSF becoming unsatisfactory. The trustees failing to appoint nominee as a trustee would not warrant the ATO exercising this power.

If the ATO threatened to remove a trustee or all trustees if the trustees/members do not appoint the nominee, this would be a misuse of statutory power and legally challengeable. Equally, the ATO “delisting” the superannuation fund from the SUPERLookup Website would also be a misuse of power.

Must the nominee satisfy the normal requirements for appointment as a trustee?

In short “Yes”. The nominee, must amongst other things:

• consent in writing to the appointment to a particular superannuation fund;

• be aged 18 or more;

• not be a disqualified person (eg insolvent under administration) not have been convicted of an offence of or involving dishonest conduct or have been the subject of civil penalty order;

• not be subject to disqualification order made by the ATO;

• (in the case of directors) not be subject to a disqualification either by ASIC or the Court;

• (in the case of directors) – have a director identification number.

Could the same individual be appointed to two or more SMSFs?

There is nothing in the legislation which precludes multiple appointments of the same individual to different funds.

How is the nominee appointed and removed as a trustee?

This would be by the trustee appointment procedure specified in the Trust Deed/Governing Rules. While the appointment could be way of a written resolution (if permitted by the Trust Deed/Governing Rules), most external parties (banks, registry operators, land titles authorities) usually require the formality of an appointment by deed.

Once the nominee is appointed, then the title to the existing fund assets would have to be transferred from the continuing trustees and former trustee to the continuing and new trustee. This is mandatory for real estate.

Once the nominee role has ceased, the resignation would be effected by another deed and another transfer of title of fund assets.

(These considerations do not apply if the trustee is a company – as appointment and resignation of the nominee is effected as a director appointment and resignation, and no title transfers are necessary as title is in the name of the company acting as trustee.)

Could the Trust Deed/Governing Rules be amended to effect the termination of the nominee as trustee upon the approval by the Public Trustee being withdrawn?

The trust deed/governing rules could be amended to impose a “termination of office” event for the nominee trustee. Such events could include:

• the withdrawal of approval by the Public Trustee;

• where the appointment is in relation to the superannuation of a deceased member – upon that interest being fully cashed out;

• the other trustees signing a written resolution that the nominee’s appointment is terminated;

• where the appointment is in relation to the superannuation interest of a member who is under financial management – upon the Public Trustee ceasing to be the financial manager of the member;

• where the appointment is in relation to a member who has granted the Public Trustee an enduring power of attorney – upon the revocation of that power of attorney or upon with written request of the member; and

• the relevant member dying or ceasing to be a member (by benefit payment or rollover).

Could the Trust Deed/Governing Rules be amended to preclude the nominee from being appointed as a trustee?

Subject to the express terms of the amendment power, it seems that the SIS Act would not prevent the exercise of the amendment power to preclude the appointment of a nominee of the Public Trustee.

Should the Trust Deed/Governing Rules be amended to preclude the nominee from being appointed as a trustee?

This would involve the exercise of some considerable judgement.

In certain situations, it may be beneficial to have the nominee appointed while in others it may not.

Could the Trust Deed/Governing Rules be amended to restrict the trustee role of the nominee?

While it may be possible to restrict the role of the nominee when the nominee acts in relation to a deceased member’s interest it may not be possible when the nominee acts in relation to continuing member’s interest.

In relation to the deceased member situation, the nominee is being appointed for a limited supervisory role in relation to the allocation and payment of the death benefit of the deceased member. This would involve ensuring that the deceased member’s benefit is correctly determined (and if there is any insurance cover, that the policy proceeds are recovered): that the interest of the deceased member is invested in low risk investments pending allocation of the death benefit: determining the validity of any binding death benefit nomination of the deceased and, if valid, ensuring allocation of the death benefit in accordance with the nomination, and if there is no nomination (or no valid nomination), ensuring the potential beneficiaries are identified and the death benefit is allocated to or amongst the selected beneficiaries on a proper basis.

In the deceased member situation, the role of the nominee could reasonably be restricted to the matters set out above.

In relation to the situation where the member is subject to financial management or where the nominee is acting in lieu of the member under an enduring attorney of the Public Trustee, the nominee would be acting to protect the member’s continuing interest in the fund. Consequently, the nominee would legitimately be involved in all matters relating to the member, particularly if the fund only had one investment pool.

How is the appointment of the nominee terminated?

The proposed provisions do not address the termination of the appointment of the nominee as trustee.

The Public Trustee has no statutory power to terminate the appointment as trustee or remove the nominee as trustee.

If the Public Trustee withdrew its a “approval” without the nominee voluntarily resigning, the fund would, for the next six months, retain its status as a self managed superannuation fund. If the nominee had not, in the meantime resigned, at the expiration of that six month period the fund would cease to be a self managed superannuation fund (but remain a complying superannuation fund) and become a registrable superannuation fund. As such, the fund would then be regulated by APRA. From that time the trustees would be operating a registrable superannuation entity without the required APRA and ASIC licenses – which is an offence. SIS Act penalties are imprisonment for 2 years or 120 penalty units. Offences would also arise under the Financial Services provisions of the Corporations Act.

Undoubtedly, most reasonable nominees would voluntarily resign on ceasing to be approved, upon the death benefit being allocated or upon the Public Trustee ceasing to be the financial manager of the member or enduring attorney.

The position of the fund could be improved by including automatic appointment termination events.

While the appointment of the nominee as trustee could be automatically terminated on the occurrence of specified events, this will not, by itself, cause the transfer of asset titles from the nominee. The nominee, while his or name appears on the title records still holds those assets in trust (though not trustee of the superannuation fund) but in trust for the successor trustees of the superannuation fund.

Can the SMSF Governing Rules require the cost of the appointment to be borne by the deceased member/relevant member’s interest?

The SMSF is likely to incur costs in the appointment of the nominee (cost of deed of appointment and then cost of transfer title both upon appointment and upon cessation of appointment) and cost of the nominee’s professional fees as a trustee.

As these costs only arise by reason of a particular member, it seems only reasonable that the superannuation interest of the relevant member be allocated those costs.

What will be the nominee’s fees?

The Bill requires the fees to be reasonable. The Bill does not specify any specific fee or maximum fee. The time to talk about fees is before the appointment and not after the appointment. Presumably, the level of fees would be agreed before the appointment.