What is a Self Managed Superannuation Fund (SMSF)?

It is a superannuation fund where you control the investments and decided how the fund will operate.

What are the establishment costs?

A flat total fee of $495 is payable for the establishment of the fund with up to four members. This fee is payable upfront, however with investment rebates this upfront fee can be eliminated.

What funds can be used to create my SMSF

You can roll-over any existing superannuation funds into your SMSF. Therefore, if you currently have a range of super funds, you can consolidate them. Furthermore, you can have more than one member and could combine your rollovers into the SMSF.

Note that some superannuation funds cannot be rolled over, these are older style defined benefit government schemes.

How many members can there be?

Your fund can have up to four members who do not need to be related. Therefore you can establish a fund with your partner, family, friends or a mixture. This means that all of your super balances are combined into one SMSF. When there is more than one member the individual member balances are tracked and member statements produced.

How much is required to start a SMSF?

A general rule of thumb is a minimum of $100,000 and growing rapidly, or ideally $200,000 is needed. This can be the total amount in the fund from all members. 

What are the advantages of a SMSF?

Control - as superannuation is a crucial element in attaining financial independence, it is important that you have control of these funds.  The flexibility of a SMSF allows this.

Full knowledge of investments - through a SMSF, you know what investments are made, and these are made to suit your personal circumstances. 

Protection - the assets of the SMSF are protected from bankruptcy and other legal claims.

Estate planning - a SMSF provides great flexibility in the event of the death of one member, with the ability to pay an income stream to beneficiaries.

Taxation - if structured correctly, a SMSF could end up paying little or no tax.

Can ongoing contributions from my employer be placed into my SMSF?

Yes, as of the 1st July 2005 superannuation choice of fund means that you can instruct your employer to pay superannuation contributions to your SMSF.

What is a trustee and who can be one?

You have two choices with the trustees of your SMSF, individual or corporate. Individual trustees are the most common.

Where the individual option is taken every member must also be trustee, so if you have two members these same two members will be trustees.

It is important to note that a SMSF cannot have a sole individual as a trustee, there must be more that one person as trustee if the individual option is chosen. A method around this for single people is to have a corporate as a trustee.

Corporate trustee is the other option available. This is where a company is the trustee of the super fund. It is also important to note that the member of the fund must be a director of the company if a corporate trustee option is chosen.

What can the fund invest in?

The investment options of the fund are extremely broad, the best way to detail what the fund can invest in is to take the opposite and detail what is not allowed. A SMSF also cannot invest in in-house assets, so it cannot purchase your assets from you (eg house, investment property) and have these as investments. These are the main restrictions. So your fund can invest in direct shares, share trusts, property syndicates, hedge funds or any other traditional and boutique investment. As part of our service we provide you with access to investments on a discounted basis.

Can the fund provide insurance?

Absolutely, you can arrange life and total and permanent disablement cover with any company and have the SMSF own the policy. The SMSF pays the cost of the insurance and claims this as a tax deduction, making your insurance costs more tax effective. We assist you in finding the best insurance options and completing your applications.

What are the ongoing costs?

These are charged by an accountant to complete the annual return for your fund. The fee for this service is fixed at $900 for the annual return and audit. This fee will increase only at the rate of inflation going forward. We do not prepare the return or audits, this is outsourced through an external panel of accountants.

I have an existing fund, can you do the ongoing work?

No, we only offer this ongoing service to new funds.

Who can I use for the ongoing returns?

We have an outsourcing arrangement to assist in this area, however you are free to use anyone that you want for this service and free to swap at any time as you are under no obligation.