SELF-MANAGED SUPER FUND GUIDE 2017
What is an SMSF?
Who's who in an SMSF
Advantages to an SMSF
Using an SMSF: contributions
Investment in a SMSF
Limited recourse borrowing
Getting money out of super
Regulation of an SMSF
Starting and ending an SMSF
Superannuation, or ‘super’ as it is more often known, is a cornerstone of most people’s personal financial management. Apart from their own home, for many people superannuation comprises their entire personal wealth. It is very important.
Super is a long term savings arrangement designed to assist individuals to accumulate wealth to enable them to fund (at least some of) their own retirement. Becoming self-sufficient reduces people’s reliance on government services such as the age pension.
Many countries use some form of superannuation. Australia’s current system of superannuation took form in 1983, when the then Hawke Labor government reached an ‘Accord’ with trade unions such that the unions agreed to forego direct pay increases in return for the introduction of compulsory super contributions for their members. Initially, employers were obliged to contribute an amount equal to 3% of their employees’ salary or wages into a super fund on that employees’ behalf. At a stroke, all affected workers started to save 3% of their annual income in a savings vehicle which could not be accessed until retirement. Compulsory saving for the future.
The system was expanded in 1992 to cover all Australian employees. This system became known as the ‘Superannuation Guarantee’ and it is still in place today. The introduction of compulsory super came as demographic analysts realised that the Australian population was ageing and this would place a substantial strain on social security benefits paid by the Government (especially the old age pension).
Originally, most superannuation funds were managed by professional money managers. Over time, a system through which people can manage their own superannuation has been developed. People manage their own superannuation through what is known as a self managed superannuation fund, or SMSF. As of December 2016, there were more than 585,000 self-managed superannuation funds with more than 1.1 million members. Together, these funds manage approximately one third of all superannuation assets in Australia.
This guide is all about SMSFs. We explain what an SMSF is, who in SMSF suits, how to use in SMSF and how to finish up an SMSF when it is no longer needed.
This guide is a starting point for self managed superannuation. If you have an SMSF, or if you are thinking of establishing one, we encourage you to get in touch with us. Running your own SMSF can be both personally and financially rewarding – but it needs to be done right and we can help you ensure that you make an intelligent and informed decision about whether and how to manage your own superannuation.
We hope you enjoy this guide!