Self Managed Super Funds are Regulated by an Act of Parliament, have a defined structure, and are governed by the Sole Purpose Test.
An SMSF is created under the “SIS” Act full name is – Superannuation Industry (Supervision) Act 1993 (or “SISA”) and can be in two main forms
- Multiple member SMSF
– 2- 4 members
- Single member SMSF – 2 possibilities
– 2 trustees (you and one other non employee)
– Or have a Corporate trustee with you as sole director
NO member can be an employee of another (unless family)
NO Trustee can be paid for services
An important part of the law is to recognize and abide by the “Sole Purpose Test” – that an SMSF is established to pay Retirement Benefits – the purpose of this is to ensure the super assets/money are preserved and protected for retirement, and in the meantime both managed and invested wisely.
This means there are some restrictions on investments in related party assets, assets that can be acquired from related parties, and restrictions on personal use of fund assets.