More information about SMSF (Self Managed Super Fund)

The following Questions are the ones we get asked most often by people seeking advice about setting up their DIY super fund.

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Am I eligible to set up my own Self Managed Super Fund?

To set up your own SMSF you need to be over the age of 18 and not a disqualified person.
A disqualified person is a person who:

What is involved in setting up a SMSF?

The setting up and on-going operation of a SMSF is regulated by the Australian Taxation Office (ATO). The relevant laws have strict rules that govern its operation and how your money can be invested

Generally, you will need a Trust Deed, investment strategy, someone to administer your fund and an approved Auditor.

How much existing super do I need to start a SMSF?

You will need to have sufficient money to make it cost effective after covering your expenses. The amount you have should also enable you to set an investment strategy including appropriate diversification that is suitable for your fund and its members. You can rollover any of your existing superannuation into your SMSF.

How much does it cost?

Costs can vary between service providers but generally include setting up your Trust Deed, on-going administration fees and auditing fees.  Fees for investments depend upon the type of assets and investment vehicles you choose to invest in.

Simple Super Solutions can provide you with an estimate of costs for establishing your own fund.

How many members can be included in a SMSF?

Rules limit the number of members to four. Members can include your spouse, partner, children, other family members, relatives, friends or a mixture of these. The members of the fund do not have to be related to each other.

What is a Trust Deed?

A Trust Deed is the legal document that sets out the rules for establishing and operating your fund. All superannuation funds require a Trust Deed and a Trustee. For SMSF you are the Trustee of your fund. A Trustee has certain duties and responsibilities.

The Deed needs to be tailored to your individual needs and meet legal and regulator requirements.

What knowledge do I need to be a Trustee?

Both the ATO and the law expect and assume that Trustees understand their duties and responsibilities as a trustee. In addition the Trustee needs to understand the restraints on superannuation investments and the impact of the tax regulations on these. An overview of this knowledge is available on the web sites listed or your professional advisors can assist.

How do I choose my investments?

You will need to develop an Investment Strategy which basically defines the framework for making investment decisions. The investment strategy needs to take into account the personal circumstances of all the fund members including their risk tolerance, attitudes to risk and their age.

Based on your Investment Strategy you need to make asset allocation decisions by choosing
from a range of investment assets such as cash, bonds, shares and property.

How do I know my fund is being well managed?

Legislation requires that you appoint an independent Auditor who will audit the fund records and provide you with a report as well as report to the ATO if there have been any breaches of superannuation regulations.

Can I wind-up my SMSF?

Yes, you can and Simple Super Solutions can help you do this.