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Self Managed Super Funds (SMSF) or DIY Super Funds - have grown significantly in recent years, to become one of the most popular ways in which to;
- save for retirement
- generate a retirement income
- complement your Estate Plan
An SMSF provides members of the fund (typically, a husband & wife), with the ability to manage and control their own super fund. This means the members have complete control over the types of investments used to fund their retirement, as well as greater flexibility and potentially lower costs. Another important benefit relates to greater transparency, ie knowing where your funds are invested and the fees you are paying. This level of transparency is not available through retail managed super funds and industry funds.
SMSF's do have a number of fixed costs. These costs have the effect of making a SMSF structure viable only where the fund assets are approximately $200,000 or above.
At 50Plus, we can determine whether a SMSF would suit your needs, as well as provide the following services;
- establishment of your new fund - including trust deed provision
- coordination of corporate trustee establishment (if applicable)
- complete administration of your fund
- online internet access to your super fund account
- complete reporting service
- Investment Strategy preparation and review
- ongoing strategy planning
- coordination of taxation return & audit - through your accountant or our accounting associates
- estate planning services
| SMSF Advantages |
SMSF Disadvantages |
Investment Choice
You will have greater scope to invest in a wider range of investments than that which would be available through a public offer superannuation fund. Depending on your trust deed - these investments could include term deposits, bank accounts, direct shares, collectibles, real estate, etc. |
Trustee responsibility
Each trustee is responsible for the decisions and operation of the fund. This includes the overall legislative compliance. However, the trustees can seek professional advice where this is considered appropriate - for example, financial planning advice, taxation & legal advice, etc. |
Control
As trustees, you have complete control over the fund and it's investments (within the legislative framework). As trustees, you make all the decisions. Of course, you are able to call on professionals (such as 50Plus) to help you make these decisions |
Extra costs
A SMSF has additional costs such as the auditing of accounts, tax return administration and supervisory levies. However, where the fund has significant assets, these costs can be relatively low as a percentage of the fund assets. Generally, 50Plus would not recommend a SMSF where the fund assets are less than $250,000 |
Estate Planning
SMSFs may provide you with a range of estate planning options - including the form in which benefits are paid to your beneficiaries/estate (pension,lump sum or a combination of both). |
Complexity
Running your own SMSF can be complex. Whilst the team at 50Plus can remove a considerable amount of this complexity, there is no doubt the SMSF path is much more involved when compared with public offer superannuation funds. |
It is important that anyone contemplating the establishment of a SMSF is aware of the responsibility that comes with this decision - a responsibility that must not be taken lightly. To learn more about these responsibilities, the Australian Taxation Office (ATO) has prepared the publication "Role & Responsibilities of Trustees" - which can be downloaded from the following link;
http://www.ato.gov.au/corporate/content.asp?doc=/content/46427.htm
This publication is also available within the Office News section of our Client Login area.
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