SELF MANAGED SUPER FUND
A Self-Managed Super Fund (SMSF) is a superannuation fund designed for members to have direct control over their retirement savings and investments.
A Self-Managed Super Fund (SMSF) is a superannuation fund designed for members to have direct control over their retirement savings and investments.
SMSF differs from a normal super fund because all of the members act as trustees, with the authority to make the day-to-day decisions about how the fund operates and how to invest, subject to the superannuation laws. Trustees are also responsible for the overall investment strategy and all legal and statutory requirements. An SMSF can have up to four members, all of whom are trustees of the Fund. As trustees, each member is personally liable for all decisions made by the fund. Unlike public offer funds (industry or retail funds), SMSFs are regulated by the Australian Taxation Office (ATO) rather than the Australian Prudential Regulation Authority (APRA). Trustees must comply with both the superannuation law and the SMSF governing rules or potentially face significant penalties.
SMSFs can pursue asset allocations that would be difficult to implement in an APRA-regulated fund SMSFs can have longer-term investment horizons (ie not chasing short-term performance driven by league tables and ‘peer risk’)
SMSFs can be run in a tax-efficient manner, particularly in transition to retirement and in managing assets supporting a pension
there may a better alignment of interests in an SMSF – members can make well informed decisions in their own interests with minimal agency costs
members may be able to negotiate directly for reduced prices for the various services they need (e.g. accounting, administration and broking).
