What’s involved in a self-managed super fund?

Self Managed Superannuation Funds Simplified

SMSF Simplified

Self-Managed Super Funds (SMSF or DIY Super) are the biggest sector of super in Australia in 2011. So what is involved in a self-managed super fund?

Superannuation is a long term savings arrangement in preparation for retirement, and is part of the government’s plan to ensure adequate retirement income. Employers, self-employed, employees and family members (on behalf of others) can contribute to a super fund.

Contributions can be made to either –

  • Independent large super funds such as retail, industry, bank and financial institutions (Regulated by APRA – Australian Prudential Regulatory Authority)
  • Retirement Savings Accounts (RSA) banks, institutions (rare)
  • Own self-managed super fund (SMSF) you manage it (Regulated by the ATO)

Under Australian superannuation law, you have the ability to choose to contribute your personal superannuation contributions (and in some cases, direct your employer to pay employer contributions) to a superannuation fund of your choice. All super funds are trusts, as your money is held in trust until you are eligible by law to access it to fund retirement.

Note – The Australian Tax Office regulates SMSFs and has several publications.

1.1.          What is a Self Managed Superannuation Fund (SMSF)

An SMSF works like any other super fund, which all have trustees, but the responsibility of managing it rests solely on you as the trustee. Like all superannuation funds, SMSFs invest contributions and provide a benefit to members on retirement.

Generally, a superannuation fund is an SMSF if:

  • it has four or less members
  • each member of the fund is a trustee or a director of the corporate trustee
  • each trustee or director of a corporate trustee is a member of the fund
  • no member of the fund is an employee of another member of the fund, unless they are related
  • no trustee of the fund receives any remuneration for their services as trustee and
  • the fund has a trust deed that meets the requirements of the Superannuation Industry (Supervision) Act 1993 (SIS Act)

1.2.          How Does a Self Managed Superannuation Fund Differ from Other Superannuation Funds

The difference between a self managed superannuation fund and other types of superannuation funds is that members are also trustees, or directors of a corporate trustee. This means they control the investments of the fund, the payment of their benefits and are ultimately responsible for the ongoing compliance of the fund.

1.3.          Are There Different Types of SMSFs?

There are two main types of SMSFs, based on structure, that is, whether there will be a corporate (special super company) or individual trustees. Another difference is the number of trustees, single member or multiple, up to four trustees/members.

Corporate Trustee:

  • four or less members,
  • each member also a director of the company who is the trustee itself
  • no member an employee of another member unless related
  • corporate trustee, nor any director is paid for services related to the fund

Individual Trustee:

  • four or less members
  • each member is a trustee
  • no member an employee of another member unless related
  • no trustee is paid for services related to the fund

Single Member Funds come in two forms

  • with corporate trustee, member must be sole director of the corporate trustee, or one of two directors either related or not an employee of each other
  • two individual trustees, one a member and the other either related or any other person who does not employ them

To learn more about this and the following topics –

  1. What’s involved in an SMSF and does it suit you?
  2. I want my business to be my super – can I do this and how?
  3. Should I borrow to buy property for my SMSF?
  4. Can stock market shares be included in the investment mix?

see Seminar page http://wp.me/P1sLJd-f


About SuperBenefitnews

Self-Managed Superannuation Service Providers in Australia. SuperBenefit provides a wholistic SMSF assistance, education and administration service continuum - 1. “assistance” is help of whatsoever nature where our overall SMSF experience and knowledge enables us to provide assistance/help without any legal (or “license”) limitations. 2. “education” involves providing knowledge through teaching, coaching and mentoring about all matters SMSF, including (but not limited to) investment issues such as equities and property, 3. “administration” encompasses all admin aspects of legally required SMSF trustee and member record keeping including (but not limited to) audit and ATO matters. In keeping with our key point that SuperBenefit does not provide Financial Advice, where issues arise from 1, 2, and/or 3 above Indicate a need for a legally authorized provider (such as a Financial Adviser) and the client does not have their own service provider, the client can utilize SuperBenefit’s ‘Connect Assist’ … SuperBenefit, in itself, does not provide Financial Advice, but it does provide the wherewithal for great SMSF service. WE do not provide Financial Advice or any other service that requires a legally authorized provider. However, where such advice or service is required we have our ‘Connect Assist’, a SuperBenefit resource we use to connect clients to a Licensed Advisor or other legally authorised service provider. Call us 0407 361 596, no obligation FREE Connection call to see how we can help you!
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