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What is a self managed super fund?

A self managed super fund (SMSF) is a small superannuation fund arranged under Super law to give you more control of how your superannuation assets are invested.

A self managed super fund allows you to:

• have up to a maximum of 4 members 
• invest directly in most assets like cash, shares, managed funds and property 
• specifically manage the tax position of your superannuation assets 
• consolidate your family's super within a single fund  

Are there different types of self managed super funds?

A self managed super fund is a small or private super fund generally divided into two main types:

• Self managed super funds or SMSF (regulated by the ATO) 
• Small APRA Funds or SAF (regulated by the Australian Prudential Regulation Authority - APRA) 

When is a self managed super fund an appropriate option?

If you want to take control (and responsibility) of how your superannuation money is invested, a self managed super fund lets you invest in direct cash, shares, managed funds, property and other assets. You may also be looking for ways to maximise your tax planning and estate planning. 

A self managed super fund might be appropriate for you if you are: 

• a retiree who is looking to take a more active role controlling their retirement income or minimising costs associated with managing their retirement wealth; 
• a family group (maximum 4 members) who, through pooling their super, are able to obtain fee advantages in a self managed super fund.  

Bear in mind there are a number of strict compliance rules that govern SMSFs and SAFs. These are prescribed by legislation and by the ATO and APRA (who regulate these funds).

How do I know which small super fund is better for me?

A qualified financial adviser will be able to help you determine whether a small APRA fund or a self managed super fund is better for you.

What assets can I include in a self managed super fund?

As a self managed super fund investor you can choose from the follow types of assets: 

• Real property (commercial and residential property);
• Australian and international listed securities; 
• Corporate debentures; 
• Cash, bank bills and fixed interest securities; 
• Managed investments; 
• Certain derivative investments. 

Bear in mind there are a number of strict investment rules that govern self managed super funds. The ATO (who regulates these funds) has outlined specific areas of trustee governance with their tax office compliance approach. 

How much time will I need to administer a self managed super fund?

If you set up an SMSF, you need to be prepared for a significant time commitment. 

What is custody?

Custody refers to the safekeeping of assets on behalf of another. The custodian may aggregate portfolios, collect and reconcile income, settle asset purchases and sales, re-value assets and facilitate any offshore investments.

Will I be able to rollover my existing superannuation entitlements into my SMSF?

This depends on the rules of the superannuation fund that you are currently in. We advise that you should consult with your existing superannuation fund provider to ensure that you will be able to rollover/transfer these benefits to your SMSF.

What name can my SMSF be called?

You have choice of fund name (except for using some proscribed terms such as royal, chartered or defamatory terms) for example:

• Golf Course Superannuation Fund;
• Smith Family Superannuation Fund;
• John Smith Superannuation Fund;
• My Retirement Pension Fund;
• Great Dividing Range Pension Fund. 

Who can be a member of my SMSF?

The SMSF definition:

• Has less than 5 members; 
• Each individual trustee of the fund is a fund member; 
• Each member of the fund is a trustee; 
• No member of the fund is an employee of another member of the fund, unless those members are related; and 
• No trustee of the fund receives remuneration for their services as a trustee. (Note: Trustees can receive remuneration for non-trustee services they provide to the fund on an arm's length basis in a separate professional capacity.)

Does a one member fund have to have a corporate trustee?

It is possible to have an SMSF with only one member.

What are the establishment requirements for a self managed super fund?

You should obtain appropriate professional advice before setting up your own SMSF and on an ongoing basis, as required.

The ATO guide Self managed superannuation funds - Role and responsibilities of trustees at www.ato.gov.au/super is a useful overview. 

Does my fund require a bank account?

Yes, your SMSF fund requires a bank account through which fund transactions occur, and provides for the liquidity for the fund to pay its liabilities such as member benefits, administration fees, taxation expenses and life insurance premiums.

The bank account is also the conduit through which all contributions are made into the fund.

Who can be a trustee?

Please refer to the ATO guide 'Self managed superannuation funds - roles and responsibilities of trustees' at www.ato.gov.au/super

How do I open a RaboDirect DIY Super Account?

Simply complete the online application form and send the information to us

Disclaimer

No investment advice provided to you. This web site is not designed for the purpose of providing personal financial or investment advice. Information provided does not take into account your particular investment objectives, financial situation or investment needs. You should assess whether the information on this web site is appropriate to your particular investment objectives, financial situation and investment needs. You should do this before making an investment decision on the basis of the information on this web site. You can either make this assessment yourself or seek the assistance of any adviser.