Self Managed Super Funds (SMSF)

How will SMSF benefit you?

Control – Decide what you want to invest in and decide when your benefits are paid – in other words, SMSFs allow you to control your wealth creation strategy in super.
Gearing – Use borrowed money in super to invest in assets such as property. Investing in property has the potential to significantly improve wealth creation and the overall fund balance by the time you transition to retirement – in other words, gives you the ability to leverage for improved wealth creation in super.
Consolidate – Aggregate and invest a family’s superannuation benefits as well as provide a pool of monies and assets to look after family members, including children and grandchildren at the time of an accident, sickness, permanent disability, death, pre-retirement and retirement – in other words, gives you greater flexibility to create long term wealth for your family – not just your retirement.

Setting up your own SMSF – Things to consider
Running your own SMSF can provide a great means of managing your retirement savings, with the potential for more control, greater choice, and lower costs. In fact, more than one million Australians are now members of a SMSF.

Each member of a SMSF is required to be a trustee of the fund (either as an individual or as a director of a corporate trustee). As a SMSF trustee, you take on the responsibility for the fund’s performance and have certain obligations to comply with self-managed super fund rules.
Managing your own retirement funds can be very rewarding, but here are some of the key responsibilities that you need to be aware of:

1. Make sure a self-managed super fund is right for you.

2. Understand your SMSF’s framework. Your fund’s structure – the specific requirements for your fund will differ depending on how it is set up, in particular whether it has a single member, individual trustees or a corporate trustee. Your fund’s trust deed will need to be prepared by a qualified professional as it is a legal document. As well as being the instrument that establishes the fund, your deed sets out factors such as the structure of the fund, your investment strategy, who can be beneficiaries and how benefits can be paid. These are important decisions that determine the direction of the fund.

3. Comply with SMSF regulations. Being the trustee of a SMSF demands a commitment to understanding and keeping up with the rules and regulations surrounding SMSFs. We will continue to educate you around the do’s and don’ts. You (and any other trustees) need to make sure the fund is compliant with numerous regulations.

4. Compliance obligations for SMSFs. Each year you need to prepare and lodge your fund’s annual return with the ATO. This involves preparing financial accounts and statements that meet the accounting standards reporting member contributions and paying the SMSF supervisory levy. You need to arrange an annual audit by an approved SMSF auditor (we can assist here).

5. Make sure you are in it for the right reasons. Your fund has to be created and maintained for the sole purpose of providing retirement benefits to the members (or their dependents if a member dies before retirement). The sole purpose test is a cornerstone of SMSF law and is designed to protect your retirement savings. If your fund does not operate for this sole purpose it will not be eligible for the attractive tax concessions which are normally available to a compliant SMSF. Even more seriously though, trustees may face civil and criminal penalties.

6. Invest wisely. While managing your own superannuation fund does give you flexibility and control when it comes to investing your fund’s money, you must always invest according to the fund’s trust deed, investment strategy and superannuation law.

PLEASE NOTE: In order to determine the suitability of this product, we recommended that you seek independent advice from a Licenced Financial Advisor.

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