SMSF | A.T. Partners Accountants & Business Advisors Pty Ltd

Retirement is About Freedom and Flexibility. Your Super Should Be Too!

In the past, most people invested their Superannuation in Retail or Industry Superfunds to which their employers contributed a percentage of their salary. Fund managers then made investment decisions on behalf of the members of those Funds.

This landscape has dramatically changed in the past 10 years, with over 1 million Australians having switched from Retail or Industry Funds to SMSFs. The reasons for the change include the additional control over their Super and potentially lower fees. Now let us have a closer look at the advantages that a SMSF can offer.

Take back total control of your Super

A SMSF gives you total control of your Super by allowing you to choose where you invest your Super Benefit. Many of our clients who are disappointed with their Superfund’s performance or simply think that they can do a better job investing their Super Benefit themselves are choosing to establish and manage their own SMSFs.

Having total control means the members of the SMSF can invest in a wide range of investments. For instance, with a SMSF, you can invest in Term Deposits, Australian & International Shares, Residential & Commercial Property.

Accumulation and Pension Fund in one

With Retail and Industry Funds your benefit is typically invested separately in a Pension or Accumulation Account. This means that when you wish to drawdown your Super Benefit as a Pension your Super Benefit will need to be transferred to a separate Pension Account and any additional contributions you make will be added to a completely separate Accumulation Account.

A SMSF is a Pension and Accumulation Fund in one. You can commence a Pension and continue contributing to the same SMSF. There is no need to split your Super Benefit into multiple Funds.

Manage up to 4 members’ Super in one SMSF

You can set up a SMSF for yourself and add up to three other people and consolidate the super balance from each member into one SMSF. This enables you to reduce the average fee per member to run a SMSF given our annual fee is the same for 1, 2, 3, or 4 members.

Transfer assets from your personal name to a SMSF

It is possible for Members to make contributions of assets instead of cash such as Shares, Managed Funds, and Commercial Property from the Members’ personal names into a SMSF (it’s called in specie contributions). In specie transfers allow you to consolidate your Family Assets under the one SMSF tax advantaged umbrella. We note that taxation and capital gains tax issues should be considered and these are considered here.

Save fees on managing your Super

A SMSF can also be the most cost effective type of Superannuation Fund, particularly considering A.T Partner’s low annual fee starting from $1,404 fixed irrespective of your Super balance. Please visit our super admin section for more information. This is unique in comparison to other Superannuation Funds whose fees increase as your Super balance grows.

Before you start

SMSFs are a great vehicle to take back control of your Super but they are not right for everyone. Managing a SMSF takes time, responsibility & knowledge so it is important for you to understand what is involved in managing your SMSF.

Have us contact you!

Self Managed Superannuation Funds

Setting up your own self-managed superannuation fund (SMSF) can have its advantages, but before you make this decision it would be prudent to speak to us or your financial planner.
If you have less than $200,000 in superannuation, then the administrative costs would probably make the venture uneconomical. In addition to establishment costs, you can expect to spend some $1,500 to $2,500 a year on running your fund.

Aside from costs, you also need the skills and time to manage your own fund, or use the services of an accountant and financial planner to ensure that you are fully compliant.

Nevertheless there are some advantages in having your own super fund, not only does it give you greater control over your investments but offers a wider choice of assets to invest in. The sole purpose of an SMSF must be to secure money for your retirement so you cannot use assets in the fund for your current benefit.

If you decide to establish your own, where do you start? According to the Australian Taxation Office, there are four key steps:

Organise a financial advise from a AFSL holder
Establish the trust and other documents that a SMSF specialist will prepare.
Elect to be a regulated fund, obtain a tax file number and an Australian business number.
Prepare an investment strategy.
Open a bank account.

We can help with the process of establishing the deeds etc but as we cannot advise you on whether it is the right financial decision for you. Therefore, we recommend that you obtain the services of a Financial Planner who holds an Australian financial services licence.

The trust deed sets out such matters as the details of the trustees, how they are appointed, their powers and the conditions for contributions and benefit payments. You must make sure the trust deed is dated and properly executed.

All SMSFs must have trustees and in turn all members of the fund must be appointed as trustees. Anybody aged over 18 can be a trustee as long as they have not been convicted for an offence involving dishonesty or are undischarged bankrupts.

As a trustee, you are legally responsible for the actions of the fund. Your responsibilities include filing an annual tax return, lodging member contributions statements and appointing an approved auditor to complete the annual audit. The next step is to elect to be regulated by the Superannuation Industry (Supervision) Act (SISA) in order to receive concessional tax treatment.

We can also help you in applying to the ATO for the ABN and Tax File Number together with electing to be a regulated fund. The Investment Strategy would be prepared in conjunction with the trustees and also the financial planner. All that is then left to do is to open a bank account and have your current superannuation rolled over to your SMSF.

Please contact us for any further information.

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