An SMSF or self-managed super fund is a superannuation trust structure that ensures financial returns to its members when they retire and can have between one to four members. With SMSFs the members are also the trustees of the fund which is the main difference between SMSFs and other super funds. One key advantage is the amount of control the trustees have when it comes to tailoring the fund to meet their needs. This is in contrast to retail and industry super funds, which are setup to benefit a large group of members and decisions are based on the overall interests rather than what is best suited to individuals.
How do SMSFs work?
An SMSFs one purpose is to provide financial benefits to members when they retire and ultimately their beneficiaries. They have their own Tax File Number (TFN), Australian Business Number (ABN) and transactional bank account, enabling them to receive contributions and rollovers, make investments and pay pensions. All investments owned by fund and controlled by the trustees. As a SMSF is a trust it requires a trustee which can be either a Corporate or Individual trustee.1. With a
- Corporate trustee a company is the trustee and the members are all directors of the company allowing simpler recording and registering of assets and provides administration efficiencies and flexibility in membership. Setting up a Company and ongoing fees are payable using this structure.
- Individual trustee – the members are appointed as a trustees, with a minimum of two trustees.
What are the responsibilities of a trustee of an SMSF?
SMSF trustees are responsible for making investment decisions and ensure that the investment strategy is implemented. SMSFs have strict administrative obligations requiring trustees to maintain accurate records, provide financial statements, complete tax returns and organise independent audits. That is why most trustees use the services of a SMSF specialists to manage the accounting, auditing and tax returns and provide financial and investment advice. Despite using a specialist the trustees always remain totally responsible for the decisions and administration of the fund.
How we support SMSF trustees
We provide a comprehensive support service to assist SMSF trustees. Including accounting, investment and financial advice, estate planning, insurance, mortgage and property services, we’re proud to be currently helping many satisfied Australian trustees to manage their retirement savings using an SMSF. If you are considering an SMSF, find out how our supported SMSF service can help you.