WHAT IS A SELF MANAGED SUPERANNUATION FUND ?

A Self Managed Superannuation Fund is established by the execution of the Trust Deed by the proposed members/Trustees. The Deed provides for the benefits to be paid as a lump sum, allocated pension, life time pension, fixed-term pension or combinations thereof, providing control and flexibility in an extremely tax efficient investment and income stream instrument. Each member’s account can be tailored to suit changing family and financial circumstances.

Members taking control of their superannuation are conferring equal importance on superannuation and non-superannuation investments. Ultimately, all investments are being made with a view to the members and dependents living with dignity and in comfort.

Over 280,000 small superannuation funds (four or less members) with assets in excess of $97 Billion in value exist in Australia today.

A Self Managed Superannuation Fund is administered in accumulation or pension modes or combinations thereof. The main features are:

• CONTROL – The members or a company controlled by the members of the Fund acts as the Fund Trustee/s.
• FAMILY FUND – Up to four (4) members can participate.
• BUSINESS FUND – Business partners may be the Trustees and members.
• SECURITY – The Trustee/members control the Fund Bank or Cash Management Trust account and hold the investment certificates of title.
• FLEXIBILITY – The Fund can accept personal and multiple employer contributions. On retirement a member’s account may pay a lump sum or continue administration as a pension paying a tax effective income stream without impacting on other accounts in accumulation phase. Benefits may be paid in specie.
• PORTABILITY – The Fund is totally portable; it is not necessary for each member to reside at the same address or even the same State and may also live overseas with minimal limitations.
• INVESTMENT – The Trustee/members determine and implement the investment strategy usually with the assistance of a specialist adviser.
• BANKRUPTCY PROTECTION – A member’s fund assets are normally protected from creditors in the event of bankruptcy.
• ADMINISTRATION – The Fund establishment and compliance administration is conducted on behalf of the Trustee by Zenith Portfolio Services Pty Ltd.
• FEE SAVINGS – The Self Managed Superannuation Fund fee structure usually delivers substantial savings when compared to traditional funds.

TRUSTEESHIP

A Self Managed Superannuation Fund:
• Has less than five 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;
• No Trustee of the Fund receives remuneration for services as a Trustee.

If the Trustee is a company:
• Each director of the company is a member of the Fund;
• Each member of the Fund is a director of the company;
• No member is an employee of another member (unless related);
• The Trustee does not receive remuneration for services as a Trustee.

A single member Self Managed Superannuation Fund may have a company as Trustee if the member is:
• The sole director of the Trustee Company;
• Is related to the other director of the Trustee Company and there are only two directors of that company;
• Is not an employee of the other director of the Trustee Company and there are two directors of that company.

If the single member Fund Trustee is not incorporated the Fund must have two individuals as Trustees where the non member Trustee is:
• Another person who is a relative of the member;
• Any other person provided the member is not an employee of that person.

WHO CAN BE A TRUSTEE

Generally anyone over the age of 18 can be a Trustee of a superannuation fund if they are not a disqualified person. An individual is a disqualified person if:
• At any time the person has been convicted of an offence involving dishonesty;
• At any time the person has been subject to a civil penalty order under SIS;
• The person is an undischarged bankrupt.

A company would not be permitted to act as Trustee if:
• A responsible officer of that company is a disqualified person (a responsible person includes a director, secretary or executive officer);
• A receiver, official manager, or provisional liquidator has been appointed to the company;
• Action has commenced to wind up the company.

The requirement that all members be Trustees ensures each member is fully involved in the decision making process and proper management of the Fund making sure of standards compliance, acting honestly and prudently in the best interests of all members while applying the same care, skill and diligence as if entrusted with the property of another.

As the fund assets are beneficially the members and dependents, then who better to act as Trustee than the members or a company controlled by the members.

Members of the same fund may fit into different account phases, that is, one member may be in accumulation phase whilst another is receiving a pension/s. One member may be self-employed while another is an employee.

Zenith will assist on all matters pertaining to Trusteeship and provide all establishment documentation including Trust Deed, Regulatory applications, minutes and arrange the rollover of previous fund assets.

DEATH & DISABILITY BENEFITS

The Trustee may include insured death and disablement cover on a member. Existing insurance policies may be transferred into the Self Managed Superannuation Fund with premiums paid by the Trustee/s being tax deductible to the Fund.

Death benefits payable to a member’s dependents are normally tax free while Total and Permanent Disablement benefits paid to the member receive special tax concessions.

TAXATION BENEFITS

The administration of the Self Managed Superannuation Fund in accumulation or pension modes maximises the substantial taxation concessions available.
Accumulation account asset earnings are taxed at a maximum rate of 15% .

Investment earnings on assets producing a fund pension are currently TAX FREE. Fund administration, audit, regulatory lodgement fees and insurance premiums are tax deductible fund expenses. Excess imputation credits are refunded by the ATO to the Fund.