Every Trustee is responsible for the whole fund

Superannuation law treats the trustees of a fund as jointly responsible for meeting its obligations. There is no division of duty by member balance or by who signed a particular document. If the fund breaches the rules, each trustee is accountable, regardless of who made the decision that caused the breach.

The trustees hold and manage the fund's Assets together for the benefit of the members, and the law expects them to act collectively and keep watch over how the fund is run as a whole.

Joint responsibility in practice

Trustees can be exposed by decisions they did not make. If a co-trustee makes an Investment that breaches the rules, fails to keep proper records, or misuses fund money, the contravention belongs to the fund, and every trustee may face the consequences.

Trustees are expected to stay engaged and informed, so a trustee who steps back and leaves everything to another is not shielded from responsibility by their own inattention.

How the penalty structure applies

Where a fund has individual trustees, an administrative penalty is generally imposed on each trustee separately. A breach carrying 60 penalty units, at 364 AUD per unit from 1 July 2026, is 21,840 AUD, and in a two-person individual-trustee fund that can mean two such penalties for the same event.

Where a corporate trustee is used, the penalty is generally imposed once on the company. Neither structure removes the shared responsibility; they distribute the financial consequences differently.

A hypothetical example

Consider a hypothetical example. Nadia and her brother run a two-member SMSF with individual trustees. Without telling Nadia, he lends fund money to a friend's business, breaching the ban on providing financial assistance and the investment rules. The auditor reports the contravention.

Even though Nadia neither knew nor approved, she is a trustee of a fund that has breached the law, and she may face a penalty alongside her brother.

Managing shared responsibility

Agreeing in advance how decisions will be made, requiring that significant transactions have the agreement of all trustees, and keeping the fund's banking and records transparent to everyone involved are practices that manage the shared nature of the responsibility.

Holding and minuting regular trustee meetings, even brief ones, creates a record of who agreed to what and an accountability trail the fund can rely on later.