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What is a Self Managed Superannuation Fund

A Self Managed Superannuation Fund is a small superannuation trust that has the primary purpose of providing retirement benefits to the members, and where the members themselves act as trustees of the fund.  This means that the members control and run the SMSF.

A SMSF offers members greater control over their retirement savings than other types of superannuation funds such as industry or retail super funds.  This includes wider investment choices and greater control over investments.

A SMSF also pays retirement benefits, such as pensions and annuities, directly from the fund.

Of the $1.23 trillion invested in superannuation as at 30 June 2010, $390.8 billion was in Self Managed Super Funds.  That’s 31.8% of all superannuation funds, with SMSFs now representing the largest slice of the super industry.

Lower fees and better performance

A Commonwealth Government report titled A Statistical Summary of Self-Managed Superannuation Funds (December 2009), based on ATO and APRA data, found SMSF members generally pay lower fees and that, on average, SMSF investments performed better than all other super funds over 2006, 2007 and 2008.

More control and greater flexibility over investments

SMSF members can choose where their retirement savings are invested, with options including listed shares, bonds, listed investment companies (LICs), exchange traded funds (ETFs) and direct property.

This flexibility in investment options allows SMSF members to actively manage their investments. With a hands-on investment approach, SMSF members can quickly adjust their portfolios as markets change.

How a Self Managed Super Fund could benefit you

Depending on your individual situation, the advantages of an SMSF may include:
• tailored tax management on investment income and capital gains
• greater flexibility in investment choices and asset selection
• control over your total investment portfolio, with the ability to take account of the risk profile of all your assets, including those held outside superannuation
• the ability to pool your resources with up to 4 fund members with similar financial objectives, such as family members
• maximum flexibility in establishing and managing pensions, including account based, transition to retirement and term allocated pensions as well as planning your Estate
• greater flexibility for accessing Centrelink benefits such as the age pension
• investing in direct property
• the ability to transfer personally owned listed shares, business real property and managed funds directly into your superannuation fund, and
• the ability to own business real property in your superannuation fund, to assist your business cashflow.

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The information provided on this website, including the material and contents provided in the website publications, are informative in nature only and you should not act specifically on the basis of this information alone. It should not be used as a substitute for legal, business, accounting, tax, financial planning or other professional advice. If expert assistance is required, professional advice should be obtained.

Paul Baggetta is the Founder & Principal of Baggetta & Co. Paul Baggetta has been a Taxation Accountant since 1981, a Financial Planner since 1998, and in 1993 qualified as a Real Estate Licensee, holding a Triennial Certificate (currently not trading) and operated his own Real Estate business for property investment clients for over 5 years as a second business.

Financial planning services are provided by Paul Baggetta as an Authorised Representative (No. 261469) of Capstone Financial Planning Pty Ltd. ABN 24 093 733 969. Australian Financial Services License No. 223135.

 

Taxation & Accounting services are provided by Paul Baggetta as a Registered Tax Agent (No.61487008) and is a Member of SMSF Association, FIPA & NTAA.