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Self Managed Super Fund (SMSF) Article
How to Set up a pension - Step 4

By Tony Negline.

This article may be out of date.

18th November 2010

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Step Four

The trustee must prepare a Product Disclosure Statement.

According to the Australian Securities and Investments Commission, a PDS is meant to help “consumers compare and make informed choices about financial products".

A trustee must provide a PDS to members who are beginning a pension.  This is the case even for super funds which are old.

There are formal detailed rules that detail what should be in a PDS.  ASIC has also issued guidelines which assist financial product issuers work out what should and should not go into a PDS.

Most SMSF trustees won’t have time to go through the legislation and other documentation.  Fortunately some legal firms have created generic PDS’ which can be amended for specific circumstances.

Before a trustee completes a PDS, they may need to use the services of other professionals.  For example a trustee may need to value the assets of the fund to work out the market value of fund assets.  This will help a trustee provide accurate information to a member.  The member can then work out what suits their own circumstances.

A PDS must specify all the details of the pension the trustee proposes to pay to the member.  The PDS should also tell the member what information the trustee needs to begin a pension.  (Ideally this information should be detailed on an application form which the member can complete.)

The following information is necessary to begin a pension:

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This email is general in nature only and does not constitute or convey specific or professional advice. Legislation changes may occur quickly. Formal advice should be sought before acting in any of the areas discussed. Be aware that the information in these articles may become innaccurate with time. Responsibility is disclaimed for any inaccuracies, errors or omissions. Particular investments are neither invited nor recommended and hence this publication is not "financial product advice" as defined in Section 766B of the above legislation. All expressions of opinion by contributors are published on the basis that they are not to be regarded as expressing the official opinion of any other person or entity unless expressly stated. No responsibility for the accuracy of the opinions or information contained in the contributor's articles is accepted by any other person or entity. Copyright: This publication is copyright. If you wish to reproduce this article you require a license, which can be purchased here, to do so.

 
 
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