Is a self-managed super fund right for you?

Self managed superannuation funds (SMSF) are essentially designed for people looking for greater choice and control of their own retirement savings. This type of superannuation funds is designed primarily for family members or close business associates. The Self managed superannuation market has been the fastest growing sector within the superannuation industry for the last few years, with significant growth in both new fund establishments and total funds under management (now in excess of $128 billion). There are a number of requirements set out in Superannuation Law that a SMSF must meet in order to be a regulated fund.

What is a self-managed super fund?

A superannuation fund is a type of trust that holds assets on behalf of the members of the fund for use in retirement. These assets are managed by and are the responsibility of the fund trustee. Contributions are made to a fund and invested with the ultimate aim of these amounts plus any investment earning along the way, providing either an income stream or lump sum when a member of the fund retires.

A Self-Managed Superannuation Fund SMSF (also commonly referred to as DIY superannuation fund) is simply a specific type of superannuation fund. SMSFs in Australia are regulated by the Australian Taxation Office, who defines a SMSF as a super fund with:

Fewer than five members;
Each individual trustee of the fund being a fund member;
Each member of the fund being a trustee;
No member of the fund being an employee of another member of the fund, unless those members are related; and
No trustee of the fund receiving any remuneration for his or her services as a trustee.

A SMSF can also have a company as a trustee (known as a corporate trustee) if:

each director of the company is a member of the fund;
each member of the fund is a director of the company; and
the fund has less than five members; no member is an employee of another member (unless related) and the trustee does not receive remuneration for their services as a trustee.

The requirement that all members be trustees ensures that each member is fully involved and had the opportunity to participate in the decision-making process of the fund. This promotes true self-management.

Why set up a SMSF?

There are several advantages to using a SMSF over other types of superannuation funds (such as corporate, industry or public offer). They include:

The trustees can take an active role to participate and determine where their money in the fund is invested.
Access to a broader range of investment alternatives such as direct shares (both Australian and international), residential and commercial property, managed funds, fixed interest investments and non traditional assets such as collectibles (e.g. antiques or art)
The ability to make ‘in-specie’ transfers of assets to superannuation, whether it be listed securities, managed funds or even business real property (i.e. commercial property)
The ability to directly reduce the amount of tax paid by the fund by investing in assets which pay franked dividends, and offsetting the attached imputation credits against the fund’s taxation liability
The ability to run a pension within the same structure without affecting the investment mix and triggering capital gains tax.
Potentially lower fees than traditional funds by taking control of your own fund.

How can Snowball Help?

Snowball has a specialist unit that can help you set up and fund SMSF. Snowball’s specialist unit is called CWM Accounting Services (ABN 71 006 446 037). CWM is a member of the Snowball Group and provides SMSF accounting and taxation services.

Established in 1977, CWM currently services a diverse range of clients including more than 2,000 individuals, companies, incorporated associations, trusts and self-managed superannuation funds.

CWM currently advises in the areas of income tax advice & compliance, income tax planning and salary packaging, self managed superannuation funds, business accounting (including GST/PAYG and accounting software implementation) and audit.

CWM has established a team dedicated to the establishment and ongoing management of SMSFs, who specialise in tailoring their reporting requirements to meet each client’s individual needs (through quarterly, half-yearly or annual reporting). There is currently four staff working with CWM superannuation team. This group also work in conjunction with the financial planning business CIS Financial Services who are also part of the Snowball Group and can provide specialist investment advice and portfolio administration services.

Want to find out more?

If you would like to find out more information about SMSFs please call 1300 883 122 or contact us on:

Fax: 1300 657 879

Email: smsf@cwm.net.au