Every Trustee is responsible for the whole fund

Superannuation law does not recognise a passive trustee. Trustees, or directors of the fund's corporate trustee, are responsible for ensuring the fund complies, regardless of how duties are divided informally between them. Responsibility cannot be avoided by pointing to another trustee having handled a matter, or by having simply signed what was provided.

A decision made by one trustee — an Investment that breaches the rules, a benefit paid too early, a return lodged late — can expose every trustee to the consequences. The fund is treated as a single responsibility shared by all who run it.

How penalties can multiply

For many breaches, the penalty is imposed on each individual trustee separately. From 1 July 2026 a Commonwealth penalty unit is $364, so a breach carrying 60 penalty units is $21,840 per person. In a fund with two individual trustees, the same single breach can therefore result in $43,680 in penalties across the two of them, payable personally and not from the fund.

A corporate trustee structure changes this arithmetic. Because the company is the single trustee, that category of penalty is generally imposed once on the company rather than on each director, although the directors remain jointly responsible for paying it.

A hypothetical example

Consider a hypothetical fund run by two siblings, Anna and Ben, as individual trustees. Ben arranges a Loan from the fund to a relative. Loans and financial assistance to members or relatives are prohibited. Even though Anna knew nothing about it, she is a trustee of the fund that made the loan, and can face her own penalty and be required to help rectify the breach. This example is illustrative, but the principle is real: one trustee's action becomes both trustees' problem.

When relationships change

Shared trusteeship is tested most when relationships break down. In a divorce or a Business dispute, co-trustees may disagree about investments or refuse to cooperate, yet the fund must still be run compliantly and returns lodged on time. A trustee who withdraws from involvement is not relieved of responsibility.

Death or loss of capacity of a co-trustee raises similar issues. The fund's deed, and arrangements such as enduring powers of attorney, determine what happens.

Governance practices for co-trustees

Reviewing key decisions together, keeping shared access to the fund's records and bank account, and minuting significant choices are practices that reduce the risk of a single trustee acting without the knowledge of the others. Regular joint reviews of the investment strategy and the fund's compliance position create a record that all trustees were engaged.

Individual or corporate trustee?

The choice of trustee structure shapes how shared responsibility plays out in practice. With individual trustees, each person is a trustee in their own right, penalties in the relevant category apply to each of them, and Assets must be held in all the trustees' names, which can create administrative work whenever a member joins, leaves or dies.

With a corporate trustee, a single company acts as trustee and the members are its directors, so ownership of assets does not change when membership changes and certain penalties apply once to the company. Neither structure removes the fundamental point that everyone running the fund is responsible for it.

Governance that keeps everyone informed

Agreeing that significant transactions require sign-off from all trustees, holding a documented annual review, and ensuring every trustee can see the fund's bank account and statements all help demonstrate that each trustee is genuinely engaged in running the fund.