SMSF Member Limit Change


As of the 1st of July 2019, the government will impose changes to increase the maximum number of allowable members in new and existing SMSF from 4 to 6. The increase in member size is expected to provide greater flexibility for larger families to jointly manage retirement savings.

Benefits of the change

  • Will assist the SMSF of larger families as they will be able to implement intergenerational solutions for managing long-term capital investments such as commercial property and business property.
  • Allowing an additional 2 members can provide an opportunity to improve the cash flow of the SMSF as there are supplementary contributions being made by more members
  • With 6 members, the total possible concessional contribution inflow could be $150,000 per annum instead of the current $100,000 per annum with only four members

Potential downsides

  • Adding extra members will increase the complexity to the fund’s management and investment strategy
  • There are two appropriate SMSF investment strategies, one is the early accumulation stage (younger members) and the other is the retirement stage (older members). Having members from different generations may complicate the SMSF’s investment strategies as the priorities of the younger members may differ to the older members.
  • The alteration to the membership of a SMSF will change the trustee arrangements which can impact who controls the fund in the event of a dispute

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