SELF MANAGED SUPER FUND SET UP FAQ’S

1. Will I be able to rollover my existing superannuation entitlements into my SMSF?
2. What name can my SMSF be called?
3. Who can be a member of my SMSF?
4. Does a one member fund have to have a corporate trustee?
5. What are the establishment requirements for a Self Managed Superannuation Fund?
6. Does my fund require a bank account?
7. Who can be a trustee?
8. What if I am not sure if a SMSF is right for me?
9. How much does it cost to set up a SMSF?

1. Will I be able to rollover my existing superannuation entitlements into my SMSF?

This depends on the rules of the superannuation fund that you are currently in. We advise that you should consult with your existing superannuation fund provider to ensure that you will be able to rollover/transfer these benefits to your SMSF.

2. What name can my SMSF be called?

You have choice of fund name (except for using some proscribed terms such as royal, chartered or defamatory terms) for example:

Golf Course Superannuation Fund;

Smith Family Superannuation Fund;

John Smith Superannuation Fund;

My Retirement Pension Fund;

Great Dividing Range Pension Fund;

3. Who can be a member of my SMSF?

Per the ATO guide “A guide for trustees running a self managed superannuation fund” www.ato.gov.au/super

The SMSF definition

• has less than 5 members;
• each individual trustee of the fund is a fund member;
• each member of the fund is a trustee;
• no member of the fund is an employee of another member of the fund, unless those members are related; and
• no trustee of the fund receives remuneration for his or her services as a trustee. (Note: Trustees can receive remuneration for non-trustee services they provide to the fund in a separate professional capacity.)

An SMSF can also have a company as a trustee (known as a corporate trustee) if:

• each director of the company is a member of the fund;
• each member of the fund is a director of the company; and
• the fund has less than 5 members; no member is an employee of another member (unless related) and the trustee does not receive remuneration for their services as a trustee.

The requirement that all members be trustees ensures that each member is fully involved and has the opportunity to participate in the decision making processes of the fund. This promotes true self management.

What is the definition of employee?

Under SISA, an employee generally includes, a person engaged to perform services for salary and wages, a person working under a contract wholly or principally for their labour, paid company directors and certain sports persons, artists and performers.

Special rules also apply if a member is an employee of the employer sponsor of the fund. These rules generally mean the employee of the employer sponsor cannot be in an SMSF with people associated with the employer sponsor of the fund unless they are related. One exception is for directors of the same employer sponsor company. Regulations have been passed which effectively mean these individuals can be members of the same SMSF (providing all other SMSF rules are met).

4. Does a one member fund have to have a corporate trustee?

Per the ATO guide “A guide for trustees running a self managed superannuation fund” www.ato.gov.au/super

It is possible to have an SMSF with only one member.

If the single member fund has a corporate trustee, the member must:

• 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
• not be an employee of the other director of the trustee company and there are only two directors of that company.

If the single member fund does not have a corporate trustee, the fund must have two individuals as trustees. The member must be the trustee with:

• another person who is a relative of the member; or
• any other person provided the member is not an employee of that person.

5. What are the establishment requirements for a Self Managed Superannuation Fund?

Please ensure that you read the ATO Guide for trustees running a SMSF, to ensure all trustee and membership rules are complied with.

1. Establish a superannuation fund deed
2. Trustees complete notice accepting appointment and confirming that they are not disqualified persons
3. Formal acceptance of position and notice that s/he is not a disqualified person prior to formal appointment as trustee.
4. Individuals apply to join the fund and nominate beneficiaries and complete membership application and nomination form prior to joining the fund
5. Document decisions to establish the fund, admit members, appoint auditor, administrator etc.
6. Various minutes or resolutions of trustee, and employer where applicable.

Upon commencement of the fund

1. Elect to be a Regulated superannuation fund. Elections must be lodged with the ATO by completing an Application to Register for the New Tax System Superannuation Entity form
2. The fund must lodge the application with the ATO within 60 days of the fund’s establishment.
3. Obtain a tax file number. Each superannuation fund will be allocated a TFN and an ABN after lodgement of the Application to Register for the New Tax System Superannuation Entity.
4. Notify members of their rights and benefits under the fund
5. Notice outlining rights, benefits, etc…at time of admitting the member
6. Set an investment strategy. A written summary of the investment objectives of the fund including commentary regarding risk, diversity, asset allocation, liquidity, return etc. As soon as possible after commencement of the fund.
7. Open a bank account.

6. Does my fund require a bank account?

Yes, your SMSF fund requires a bank account through which fund transactions occur, and provides for the liquidity for the fund to pay its liabilities such as member benefits, administration fees, taxation expenses, life insurance, etc…

The bank account is also the conduit through which all contributions are made into the fund.

7. Who can be a trustee?

Please refer to the ATO guide “A guide for trustees running a self managed superannuation fund” www.ato.gov.au/super

8. What if I am not sure if a SMSF is right for me?

Super Outsource is licensed under the Financial Services Reform (FSR) (license number 240241) to be able to provide advice limited to superannuation.

Super Outsource can provide a statement advice for you in relation to establishing an SMSF. Our fee depending on your circumstances could cost an additional $5,500 incl GST.

Alternatively, Super Outsource could refer you to an appropriately qualified and licensed financial adviser if you require more detailed advice or a comprehensive financial plan.

9. How much does it cost to set up a SMSF?

The initial off once fee for the SMSF trust deed purchased from Super Outsource costs $660 for individual trustees, however if a corporate trustee is required an additional $1,375 for a new company.

Disclaimer

No investment advice provided to you. This web site is not designed for the purpose of providing personal financial or investment advice. Information provided does not take into account your particular investment objectives, financial situation or investment needs. You should assess whether the information on this web site is appropriate to your particular investment objectives, financial situation and investment needs. You should do this before making an investment decision on the basis of the information on this web site. You can either make this assessment yourself or seek the assistance of any adviser.

To find out more and to apply online to see if a Self Managed Super Fund suits you, click here.