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Self-Managed Superannuation Funds

Paisley Robertson, through its associated company, PR Financial Services Pty Ltd, corporate authorised representative (311982) of Merit Wealth, can provide you with professional superannuation and SMSF advice to ensure superannuation matters benefit you and your family.  Bernadette West and Andrew Morrison, directors of Paisley Robertson, hold RG146 Accreditation for SMSF & Superannuation, enabling them to give strategic advice on superannuation and SMSF establishment and administration.

Bernadette West is a limited authorised representative (number 311981) of Merit Wealth Pty Ltd ABN 89 125 557 002 AFSL 409361. Bernadette’s Financial Services Guide

Andrew Morrison is a limited authorised representative (number 1239966) of Merit Wealth Pty Ltd ABN 89 125 557 002 AFSL 409361. Andrew’s Financial Services Guide

Bernadette West and Michael Graham are also registered Self Managed Superannuation Fund auditors.

Merit Wealth

 

 

Merit Wealth Pty Ltd

Phone: 1300 785 611 Fax: 02 8916 4261

Email: contactus@meritwealth.com.au

Level 2, 115 Pitt Street, Sydney NSW 2000

www.meritwealth.com.au

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Superannuation is a government legislated program designed to enable every worker to save and accumulate a percentage of their earnings to provide for their retirement.

Australia’s superannuation system is acknowledged as one of the most comprehensive in the world, with its mandatory employer contributions and significant flexibility.

With Australians living longer, superannuation is becoming increasingly important. Historically, retirement generally only lasted 5-10 years, improvements in general health and modern medical practices means that for many of us retirement may last between 20 to 30 years or longer.

Your choice of super funds

Broadly, there are 8 different types of super funds to choose from, including:

  1. MySuper
  2. Retail funds
  3. Industry funds
  4. Public sector funds
  5. Corporate funds
  6. Eligible rollover funds
  7. Self-managed super funds
  8. RSA Accounts

Each type of super fund listed above has different features and benefits, and can be simple or complex, depending on your needs.

Paisley Robertson is a specialist in superannuation, and provides specific expertise in Self-Managed Super Funds (SMSFs).

A Self-Managed Super Fund (SMSF)

Self Managed Superannuation Funds (SMSF) are a popular choice for many working and retired Australians. It is now the largest sector of the superannuation industry.

A SMSF provides one of the most tax effective and flexible ways to grow wealth for retirement. However, managing your own superannuation takes knowledge, skill, time, and money and it is important that you satisfy yourself that you are willing and able to invest the necessary time and energy to successfully manage an SMSF.

Paisley Robertson and its associated company, PR Financial Services, can take away much of this burden as they are highly experienced and skilled in superannuation and SMSF.

How do SMSFs work?

All superannuation funds are managed and controlled by trustees who make the decisions about where and how to invest the funds of members. It is the duty of the trustees to act at all times in the best interests of members of the fund.

An SMSF is a type of trust with specific rules detailed in a trust deed, and also through various forms of legislation.

Membership of an SMSF is limited to 4 or less members. All members must also act as Trustees of the trust and also have responsibility for running the fund on a day to day basis.

Trustees are either individuals, or are directors of a company that is Trustee (i.e. a Corporate Trustee).

SMSFs are regulated by the Australian Taxation Office and governed by the SIS Act.

Although the Trustees are ultimately responsible for the fund, Paisley Robertson can provide strategy advice and expertise to ensure that your fund is administered correctly and efficiently.

As with other superannuation funds, the trustees must consider how to invest the fund’s assets (according to an investment strategy specifically prepared for the individual fund) and whether life insurance cover is required. This strategy must be put in place when the fund commences and must be reviewed regularly.

These restrictions are designed to protect members’ funds by ensuring that the sole purpose of the fund is to build wealth for retirement and to prevent over exposure to risk.

The advantages and disadvantages of SMSFs

The advantages

  • You retain control of your own money
  • You make your own investment and insurance decisions
  • Flexibility to meet your family’s specific circumstances and can be adjusted as those circumstances change over time
  • Ability to borrow, including to invest in direct residential or commercial property
  • Business owners can hold their business premises in their SMSFs for the purposes of tax, asset-protection, succession planning (for family enterprises) and security of tenancy
  • SMSF members can generally change their investments and/or the asset allocation of their portfolios quicker than larger funds
  • Potential to cut costs, particularly SMSFs with larger balances
  • Up to 4 people – generally family members – can pool their super savings to buy assets that individually you could not otherwise afford
  • Flexible estate planning i.e. the fund can continue after your death

The following advantages are common to most super funds, not exclusively to SMSF:

  • Funds can be used to provide benefits to the members, their children, and grandchildren
  • You can create your own retirement plan, including a transition to retirement pension
  • They are tax effective e.g. income and capital gains in the fund taxed at concessional rates
  • Benefit from other tax strategies such as salary sacrificing, transition to retirement pensions, re-contributions, etc
  • Tax free once a pension is started at age 60

The disadvantages

  • The burden of legal responsibility that each trustee carries*
  • Detailed record keeping and administration
  • Time and resources necessary to run your own super fund
  • Certain restrictions as to what assets can be bought and sold by the fund and trustees
  • Need for investment knowledge
  • Penalties for non-compliance
  • Risk of poor diversity from investing in one single asset such as an investment property
  • High costs for small balances
  • No access to the Superannuation Complaints Tribunal (SCT) in the event of a dispute
  • Hazard of a dominant trustee
  • Risk of losing interest

* These disadvantages can be offset by using a professional adviser, such as your accountant.

What next?

For a confidential, no obligation discussion, please contact us.

 

“This information has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs”.