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DIY superannuation

Is a self managed super fund right for you?

DIY or self managed superannuation funds (SMSFs) can invest in the broad range of managed funds, market leading high interest cash savings and term deposits offered by RaboPlus.

Australians can choose to put their personal super contributions with an independently managed superannuation fund or with their own self managed fund.

Self managed super funds perform the same role as other super funds, by investing contributions and making them available to members on retirement. The key difference is that the members of self managed funds are also the trustees and therefore control where their contributions are invested and the payment of their benefits.

In a nutshell, with your own DIY super fund you get to decide what you invest in and when your benefits are paid, as long as you comply with superannuation law.

If you don't already have your own DIY super fund but are interested in setting one up, you should meet with a licensed financial planner. They will help you decide whether self managed super is right for you and to establish your own fund if it is.

What is a self managed super fund?

Generally, a superannuation fund is a self managed super fund if (with a few exceptions):

  • It has a trust deed that meets the requirements of the Superannuation Industry (Supervision) Act 1993 (SIS Act) 
  • It has four or less members 
  • Each member of the fund is a trustee 
  • No member of the fund is an employee of another member of the fund, unless they are related 
  • No trustee of the fund receives any remuneration for their services as trustee 

People may decide to establish a self managed super fund for reasons such as:

  • Control 
  • Flexibility in investment decisions 
  • Estate planning 
  • Cost efficiency  

However, along with the benefits comes the respective responsibility of establishing and maintaining a DIY super fund.

These responsibilities may include:

  • Managing the investments prudently 
  • Ensuring (in conjunction with your administrator) that the fund complies with all the relevant laws at all times of the year 
  • Keeping your super fund's records (including bank accounts) separate to those for your other personal or business interests 
  • Ensuring your super fund's investments are held in the correct names 
  • Investing the fund assets in a way that meets your funds investment strategy, is prudent, and will provide for the members' retirement or death  

As a general rule, a DIY super fund may be suitable:

  • For younger people whose asset balance will probably reach more than $100,000 within 12 months of the fund being set up
  • For people at least seven years away from retiring with an expected balance of more than $200,000 within 12 months of the fund being set up
  • For people at least three years away from retiring, with an expected balance of more than $300,000 within 12 months of the fund being set up

depending on their individual circumstances, goals and needs.

 

If your asset base is likely to be less than the amounts above, a self managed fund may not be suitable for you, given the fees that administration and taxation service providers may charge.

You should always seek guidance from a qualified provider to make an informed decision.

What is the role of a self managed super fund trustee?
What does the Australian Tax Office say?

Reasons to invest your DIY super funds with RaboPlus

  • Access to hand picked managed funds that align with our transparent selection criteria 
  • A savings account linked to your super fund's every day working, business or personal bank account (a single account makes accounting clear for your trustee responsibilities)
  • Online access to set up term deposits across a wide range of fixed terms and interest rates
  • Meet your fund's investment strategy with a broad range of managed funds with diverse investment strategies 
  • 24/7 online access to your transaction history and downloadable files for your accountant
  • Capability to pick parcels online to assist tax savvy investors with Capital Gains Tax (CGT) management
  • Consolidated end of year statements and periodic reports
  • Externally audited reporting systems provided with annual tax statement

Setting up a self managed superannuation fund

You should consult with a professional adviser - who will be able to simplify the process for you - before deciding to set up your own super fund.

The Australian Taxation Office also offers the following guides to setting up your own super fund: