The revival of the Self-Managed Super Fund (SMSF)

Over the past month there have been several stories in the national media about the revival of the Self-Managed Super Fund (SMSF) and how they are becoming a popular retirement vehicle. With one story stating that the establishment of SMSF’s increased more than nine-fold last year compared to the year before, it’s important to know what’s involved in setting up and managing a SMSF.

Setting up an SMSF involves deciding whether you will have Individual Trustee’s or a Corporate Trustee, naming the fund, obtaining a Tax File Number (TFN) and Australian Business Number (ABN) and setting up a bank account. A Trust Deed needs to be drafted by a solicitor. The set up costs can range depending on the business, but $2,000 is a reasonable starting point. Each year, a tax return and audit must be prepared by an accountant, which also incurs costs of at least $2,000 per annum, depending on the complexity of the super fund. You also need to hold an annual meeting as Trustee’s, review the fund and have documentation that this meeting has occurred.