A self managed super fund (SMSF) is a small superannuation fund arranged under Super law to give you more control of how your superannuation assets are invested.

A self managed super fund allows you to:

• have up to a maximum of 4 members 
• invest directly in most assets like cash, shares, managed funds and property 
• specifically manage the tax position of your superannuation assets 
• consolidate your family's super within a single fund  

A self managed super fund is a small or private super fund generally divided into two main types: 

• Self managed super funds or SMSF (regulated by the ATO) 
• Small APRA Funds or SAF (regulated by the Australian Prudential Regulation Authority - APRA) 

A self managed super fund (SMSF) is one where:   

• There are fewer than five members;
• All members are trustees and there are no other trustees;
• No member of the fund is an employee of another member, unless those members are relatives;
• No trustee or director of the corporate trustee can be paid for being a trustee. 

A small APRA fund (SAF) is one where: 

• There are fewer than five members;
• The fund is registered with APRA and the trustee is an RSE licensee;
• There may be arm's length members - such as unrelated employees of the employer-sponsor; and

• The trustee can be paid for being trustee.

Any superannuation fund with less than 5 members that is not an SMSF or an SAF is a non-complying fund and does not qualify for concessional tax treatment. 

If you want to take control (and responsibility) of how your superannuation money is invested, a self managed super fund lets you invest in direct cash, shares, managed funds, property and other assets. You may also be looking for ways to maximise your tax planning and estate planning. 

A self managed super fund might be appropriate for you if you are: 

• a retiree who is looking to take a more active role controlling their retirement income or minimising costs associated with managing their retirement wealth; 
• a family group (maximum 4 members) who, through pooling their super, are able to obtain fee advantages in a self managed super fund.  

Bear in mind there are a number of strict compliance rules that govern SMSFs and SAFs. These are prescribed by legislation and by the ATO and APRA (who regulate these funds).

A qualified financial adviser will be able to help you determine whether a small APRA fund or a self managed super fund is better for you.

Despite having greater control, as a trustee you bear specific compliance risks of running a SMSF. The ATO has increased SMSF regulation and scrutiny. Auditors are now required to report any actual or potential compliance breaches to the ATO, and penalties may apply.

To ensure your SMSF remains compliant you should (amongst other things) 

• save only for retirement

• have an investment strategy and invest responsibly

• keep proper records

• keep your superannuation assets separate

• not lend superannuation money to members or relatives

• not borrow money

• not allow in-house assets to exceed 5% of total assets

• buy and sell assets at true market value

See 'Self managed superannuation funds - Role and responsibilities of trustees' at www.ato.gov.au/super for more information on compliance.

As a self managed super fund investor you can choose from the follow types of assets: 

• Real property (commercial and residential property);
• Australian and international listed securities; 
• Corporate debentures; 
• Cash, bank bills and fixed interest securities; 
• Managed investments; 
• Certain derivative investments. 

Bear in mind there are a number of strict investment rules that govern self managed super funds. The ATO (who regulates these funds) has outlined specific areas of trustee governance with their tax office compliance approach. 

If you set up an SMSF, you need to be prepared for a significant time commitment.  

Custody refers to the safekeeping of assets on behalf of another. The custodian may aggregate portfolios, collect and reconcile income, settle asset purchases and sales, re-value assets and facilitate any offshore investments. 

This depends on the rules of the superannuation fund that you are currently in. We advise that you should consult with your existing superannuation fund provider to ensure that you will be able to rollover/transfer these benefits to your SMSF. 

You have choice of fund name (except for using some proscribed terms such as royal, chartered or defamatory terms) for example:

• Golf Course Superannuation Fund;
• Smith Family Superannuation Fund;
• John Smith Superannuation Fund;
• My Retirement Pension Fund;
• Great Dividing Range Pension Fund. 

The SMSF definition:

• Has less than 5 members; 
• Each individual trustee of the fund is a fund member; 
• Each member of the fund is a trustee; 
• No member of the fund is an employee of another member of the fund, unless those members are related; and 
• No trustee of the fund receives remuneration for their services as a trustee. (Note: Trustees can receive remuneration for non-trustee services they provide to the fund on an arm's length basis in a separate professional capacity.)

An SMSF can also have a company as a trustee (known as a corporate trustee) if:

• Each director of the company is a member of the fund; 
• Each member of the fund is a director of the company; and 
• The fund has less than 5 members; no member is an employee of another member (unless related) and the trustee does not receive remuneration for their services as a trustee.

See 'What is a self managed superannuation fund?'  at www.ato.gov.au/super for more information

The requirement that all members be trustees ensures that each member is fully involved and has the opportunity to participate in the decision making processes of the fund. This promotes true self management.   

It is possible to have an SMSF with only one member.

If the single member fund has a corporate trustee, the member must:

If the single member fund does not have a corporate trustee, the fund must have two individuals as trustees. The member must be the trustee with:

• Another person who is a relative of the member; or 
• Any other person provided the member is not an employee of that person. 

See 'Self managed superannuation funds - role and responsibilities of trustees' at www.ato.gov.au/super

You should obtain appropriate professional advice before setting up your own SMSF and on an ongoing basis, as required. 

The ATO guide Self managed superannuation funds - Role and responsibilities of trustees at www.ato.gov.au/super is a useful overview. 

Please ensure that you read the ATO Guide, to ensure all trustee and membership rules are complied with. Key steps include:

• Establish a trust (including preparing a trust deed); 
• Trustees complete notice accepting appointment and confirming that they are not disqualified persons; 
• Formal acceptance of position and notice that s/he is not a disqualified person prior to formal appointment as trustee; 
• Individuals apply to join the fund and nominate beneficiaries and complete membership application and nomination form prior to joining the fund; 
• Document decisions to establish the fund, admit members, appoint auditor, administrator etc.; 
• Minute resolutions of trustee, and employer where applicable. 

Upon commencement of the fund:

• Elect to be a regulated superannuation fund. Elections must be lodged with the ATO by completing an Application to Register for the New Tax System Superannuation Entity form; 
• The fund must lodge the application with the ATO within 60 days of the fund's establishment;
• Obtain a tax file number. Each superannuation fund will be allocated a TFN and an ABN after lodgement of the application to register for the New Tax System Superannuation Entity; 
• Notify members of their rights and benefits under the fund;   
• Set an investment strategy. A written summary of the investment objectives of the fund including commentary regarding risk, diversity, asset allocation, liquidity, return etc as soon as possible after commencement of the fund; 
• Open a bank account.
  

Yes, your SMSF fund requires a bank account through which fund transactions occur, and provides for the liquidity for the fund to pay its liabilities such as member benefits, administration fees, taxation expenses and life insurance premiums.

The bank account is also the conduit through which all contributions are made into the fund.  

Please refer to the ATO guide 'Self managed superannuation funds - roles and responsibilities of trustees' at www.ato.gov.au/super

Simply complete the online application form and send the following information to us:

• Signed account summary form

• Signed direct debit authority

• Linked account bank statement (current copy) or an encoded bank deposit slip for the linked account or a print out of your online transaction summary. Please ensure that your name and the account number are displayed on what you provide to us. 

• An original or certified copy of the Trust Deed

• For incorporated bodies acting as trustee, a copy of certificate of incorporation and the names of company directors

• For authorised signatories:
  RaboPlus will use information provided on the account opening form to perform an electronic identity check. In some cases we may contact you and request additional information to be provided to us in the form of a certified copy of your Drivers Licence, Birth Certificate or Passport.  

No investment advice provided to you. This web site is not designed for the purpose of providing personal financial or investment advice. Information provided does not take into account your particular investment objectives, financial situation or investment needs. You should assess whether the information on this web site is appropriate to your particular investment objectives, financial situation and investment needs. You should do this before making an investment decision on the basis of the information on this web site. You can either make this assessment yourself or seek the assistance of any adviser.