Understanding Your Role In a Self-Managed Super Fund

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Are you considering transitioning from a retail superannuation fund to a Self-Managed Super Fund (SMSF)?

An SMSF offers greater control and flexibility but requires active participation and adherence to specific regulations.

If you’re considering setting up an SMSF, you must familiarise yourself with the responsibilities and roles of managing your retirement savings.

Running an SMSF can be expensive and requires considerable time and effort for administration, record keeping, reporting, and researching investments.

Consider whether an SMSF suits you unless you have advanced financial understanding and are comfortable managing money and investing concepts.

Are you eligible to be a trustee or a director?

Generally, anyone 18 years of age or over can be a trustee of an SMSF, provided they are not subject to a legal disability (i.e. bankrupt or mentally impaired). An individual is also disqualified from being an SMSF trustee if they can answer yes to any of the following:

  • Have you ever been convicted of an offence involving dishonesty?
  • Have you ever been subject to a civil penalty order imposed by superannuation law?
  • Are you considered insolvent or under administration?
  • Are you an undischarged bankrupt?
  • Have you been disqualified by a regulator (such as the ATO or APRA)?

What do I need to do in the role of an SMSF trustee?

In an SMSF, you are not just an account holder; you become a trustee or director of the fund.

This means you have a legal obligation to manage the fund’s assets and make decisions that align with its investment strategy.

You can choose between being an individual or a corporate trustee, each with its responsibilities.

The trustee’s primary responsibility is managing the fund to benefit members for retirement.

As the trustee, you must ensure fund assets are held in trust and invested on behalf of the members.

You are responsible for ensuring the fund is adequately managed and complies with all rules (including super laws and the fund trust deed). Your responsibilities as the trustee include:

  1. Making sure the fund’s purpose is to provide members with retirement benefits

2. Preparing an investment strategy should outline your fund’s goals, risk tolerance, and how you intend to invest your retirement savings. It’s essential to diversify your investments to minimise risk and maximise returns.

3. As a trustee, you can make investment decisions for your SMSF. You can invest in various assets, including shares, property, cash, etc. However, ensuring that your investments comply with the superannuation laws and regulations set by the Australian Taxation Office (ATO) is compulsory.

4. Accepting contributions and paying benefits (income streams and lump sums) per super laws and the fund trust deed.

5. Advising the ATO of any changes in trustees, directors or members within 28 days of the change occurring.

6. Ensuring an SMSF audit of the fund is conducted annually by an approved SMSF auditor. As an account owner, you must cooperate with the auditor and provide all necessary documentation to thoroughly examine your fund’s financial affairs.

7. Undertaking administrative tasks such as lodging annual returns and record-keeping. Maintaining accurate records and ensuring compliance with superannuation laws are fundamental responsibilities of an SMSF trustee. You must keep thorough records of all financial transactions, investment decisions, and tax-related documentation.

8. Managing tax within your SMSF is another crucial role. This includes ensuring that contributions, investments, and withdrawals are taxed correctly. Reporting income and tax liabilities to the ATO within the specified deadlines is vital to avoid penalties.

9. As an SMSF account owner, you can use your funds for your estate planning strategy. This involves nominating beneficiaries who will receive your superannuation benefits in case of death. Regularly reviewing and updating these nominations is essential to fulfil your wishes.

Understanding your responsibilities as an SMSF trustee

While managing your Self-Managed Super Fund offers greater control and potential benefits, it also comes with significant responsibilities.

As a trustee, you play a central role in ensuring the fund’s compliance with regulations, making sound investment decisions, and safeguarding your retirement savings.

Before making the switch, consider whether you are ready to take on these responsibilities. You can engage with experts to assist you in making the most of your SMSF.

It’s essential to seek professional advice and ongoing support to navigate an SMSF’s complexities successfully.

If you are interested in setting up an SMSF, contact us at 03 9674 3680 or email us at admin@rispin.au


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