Self-Managed Superannuation Funds (SMSF)


What is a Self Managed Superannuation Fund?

A Self Managed Superannuation Fund (SMSF) is a type of superannuation fund established so the member can have ultimate control and responsibility of the investment and administration decisions of the fund in its capacity as either Trustee of the Fund or as Director of a Trustee Company.


What are the Benefits of having an SMSF?

Cost Advantages:

SMSF costs can be somewhat fixed and limited to accounting, audit and other administration costs, whereas non-SMSF can often charge a fee based on the member balance. Where the member balance is high, the fixed cost of a SMSF can be considerably cheaper.

Investor Choice & Control:

An SMSF gives members complete control over their own investment decisions. Trustees must have an investment strategy in place that sets out the fund’s investment objectives and specifies the types of investments the fund can make.

SMSFs can allow you to use Super money to invest in assets not generally available within other super funds. For example, you can have your SMSF acquire your business premises, and pay rent to your SMSF on commercial terms.

Estate Planning:

Your Superannuation balance will not form part of your Estate on death, but you can direct how the balance is paid out via a Death Benefit Nomination

You can also use your member balance to provide an income stream to a surviving spouse or a lump sum of money to children from a previous marriage.

Adult children can be introduced as members of an SMSF at inception or at a later date. This can be a way of providing liquidity to the fund to pay benefits to older members while preserving assets held by the fund.

Carefully structured Estate Planning can result in very effective outcomes.

Creditor Protection:

Superannuation is protected from creditors, and given an SMSF can buy a member’s business property, this can be a very effective vehicle for asset protection.

However, if the premises is transferred to the SMSF with the sole intention of avoiding creditors, then this protection does not apply.


Trustee Obligations

As trustees you are responsible for running the fund and making decisions that affect the retirement interest of each member including yourself. As trustee you must:

  • Act honestly in all matters concerning the fund
  • Act in the best interests of all fund members when you make decisions
  • Manage the fund separately from your own affairs
  • Know, understand and meet your responsibilities and obligations
  • Ensure that the SMSF complies with the laws that apply to it

You can appoint other people to assist or provide services to your fund such as an accountant, tax agent, administrator or financial planner. However, the ultimate responsibility and accountability for the fund’s actions lie with the trustees.


Process to set up a SMSF

  • Determine a name for the SMSF (and Corporate Trustee if applicable)
  • Register the Fund for ABN, TFN and to be a complying fund with the ATO
  • Establish a bank account
  • Rollover existing superannuation balances if you wish to consolidate
  • Instruct your employer to pay future contributions to the SMSF bank account by providing:
    • ABN of the fund
    • Bank Account details (BSB and Account Number)
    • Electronic Service Address


Other To Do Items

  • Document an Investment Strategy and consider whether you wish to engage an advisor to assist in making SMSF investments
  • Consider whether it is appropriate for your SMSF to hold life or TPD insurance on behalf of its members