Education

The obligation covers both the fund's financial records and the records of the trustees' decisions and actions. Failing to keep them can itself be a breach, separate from whatever the records were meant to document.

It also concentrates risk. A fund dominated by one property is exposed to that single asset's fortunes, which trustees are expected to acknowledge in the fund'sInvestmentstrategy.

Because it sits within the investment strategy, the insurance question is revisited whenever the strategy is reviewed. An auditor looks for evidence that the trustees genuinely considered insurance, and a dated note recording that members' cover was reviewed and a decision reached is generally …

The test looks at how the fund is actually maintained, not just what the paperwork says. Even a genuineInvestmentcan breach it if the surrounding arrangement delivers a current benefit to a member or relative.

A company owned by a member, a family trust, or a member's spouse are all related parties, so transactions with them attract the restrictions.

It does not matter whether the intention is to pay the money back. The moment fund money is used for a present-day personal benefit without a condition of release, the access is illegal.

Paying a benefit without a valid condition is illegal early access, with the tax and penalty consequences that carries.