Factsheet: Self-managed super
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ONLINE TEXT VERSION - June 2013
Are you thinking of moving your superannuation
savings into a self-managed superannuation fund (SMSF)? Here are
some things to think about before you do.
What is an SMSF?
An SMSF is a private superannuation fund you manage yourself,
regulated by the Australian Taxation Office.
SMSFs are different from mainstream funds regulated by the
Australian Prudential Regulation Authority (APRA) which pool
members' savings and invest the money for them.
SMSFs can have up to four members. All members must be trustees
(or directors if there is a corporate trustee) and are responsible
for decisions made about the fund. If you have an SMSF, you are
responsible for managing it and complying with all relevant
If you set up an SMSF you must develop and maintain an
investment strategy, and manage all contributions and
You must also comply with:
- Superannuation and tax laws, including making sure the money is
only used for retirement benefits.
- Record keeping obligations, such as lodging annual
- Reporting obligations including reporting contributions.
- Audit requirements, including having the fund audited by an
approved SMSF auditor each year.
What if something goes wrong?
Members of superannuation funds regulated by APRA have important
protections if something goes wrong. Many of these will not be
available to you if you have an SMSF.
funds are eligible for compensation where they suffer loss as a
result of fraud or theft.
||SMSFs are not eligible for compensation if they
suffer loss as a result of fraud or theft
funds must address member complaints. Where complaints are not
resolved members must be offered access to a free and independent
complaints resolution service such as the Superannuation Complaints
||SMSF trustees/members must resolve their own
complaints. This may require costly legal assistance. SMSF
trustees/members do not have access to the Superannuation
||The trustee of
an APRA-regulated fund must be registered or licensed by APRA. APRA
funds are subject to a substantial prudential regime.
||SMSFs are subject to a less onerous prudential
regime. SMSFs are subject to compliance-based regulation by the
Questions to ask yourself before you set up an SMSF
- Do I fully understand all the legal responsibilities I am
taking on as trustee?
- Do I have the time, expertise and motivation to actively manage
- Am I confident I can do better than professional investment
managers through my investment strategy?
- Do I have enough money to make it worthwhile, given fees and
expenses such as accounting, legal, audit or tax advice?
- If something goes wrong, am I satisfied with the lower levels
of protection that apply to SMSFs, compared to APRA-regulated super
If you answer no to any of these questions, you are not ready to
set up an SMSF.
Setting up an SMSF is a big decision. Do your research and make
sure you are ready for the commitment. It is your call, your money
and your responsibility.
Need more information?
- Visit the Moneysmart
website for more information on super.
- Visit www.ato.gov.au/super for the
tax implications of super.
- Order a copy of Thinking about self-managed super?
from the ATO website or by calling 1300 720 092.
Last updated: 08 Sep 2015