What is SMSF?

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A DIY / Self Managed Super fund (or SMSF) is a superannuation fund where the members are also the trustees of the fund.

What is a SMSF going to give you?

Trustees of superannuation funds have total control over the Fund, including the investment strategy, and are ultimately responsible for everything that happens within the fund. This “control” aspect is one of the primary reasons for members setting up their own fund.

What is a SMSF going to require of you?

There are administrative and compliance obligations that come with super fund trusteeship, and new trustees need to embrace this and take it on board before they go ahead with establishing a fund. Supervision SMSF helps SMSF trustees to meet these administration and compliance obligations and ensure trustees meet their ongoing responsibilities.

What is a SMSF's key features?

A super fund is a SMSF when:

  • it has four or less members
  • no member of the fund is an employee of another member of the fund, unless they are related
  • each member is a trustee, and no trustee of the fund receives any remuneration for their services as a trustee.

or

  • if the fund uses a corporate trustee each member of the fund is a director of the company, the corporate trustee does not receive any remuneration for its services as a trustee, and no director of the corporate trustee receives any remuneration for their services as a director in relation to the fund.

What is a SMSF's policy on Single Member Funds?

  1. It is possible to have a self managed superannuation fund with only one member. A single member fund may have a corporate trustee, but the member must:
  2. be the sole director of the trustee company, or be related to the other director of the trustee company and there are only two directors of that company, or
  3. not be an employee of the other director of the trustee company and there are only two directors of that company.
  4. A single member fund may alternatively have two individuals as trustees. The member must be one trustee and the other trustee must be:
  5. a person who is related to the member, or any other person, provided the member is not an employee of that person.

Important Note: What is a self managed super fund's definition of a 'disqualified' person?

A ‘disqualified’ person is not allowed to be a trustee (or be a director of the trustee company) of a SMSF.

A person is a disqualified person if they:

  • have ever been convicted of an offence involving dishonesty;
  • have ever been subject to a civil penalty order under the SIS Act;
  • are an undischarged bankrupt;
  • have been disqualified by a regulator

Further to this, a company cannot act as trustee if:

  • a responsible officer (e.g. director, secretary, executive officer etc.) of the company is disqualified;
  • a receiver, official manager or provisional liquidator has been appointed to the company; or
  • action has commenced to wind up the company.

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