Taking Control

With the end of financial year looming and new super choice legislation set to be introduced, the time might be right for business owners to consider their own superannuation options and the DIY option.

Despite being compulsory, your superannuation payments are an opportunity to build your financial future throughout the course of your business life. And while there are many types of superannuation funds to choose from, if you want to control what actually happens with your money once it’s injected into your chosen fund, a self-managed superannuation fund (SMSF) or DIY fund might be the way to go.

SMSFs are approved by the Australian Tax Office (ATO) and have no more than four members who are also trustees of the fund, and are ultimately responsible for the trust’s activities and compliance. According to information on the Australian Superannuation Funds Association (ASFA) website (www.superannuation.asn.au), the permitted structure of a SMSF varies depending on the number of members and whether the trustee of the fund is a company or group of individuals, and so it’s important to establish which structure your fund will take early on.

There is a legal requirement for all superannuation funds to follow an investment strategy, however the whole idea behind SMSFs is the members/trustees get to decide what that investment strategy will be. There are a few compliance restrictions and conditions, and the ATO website (www.ato.gov.au/super) is a good place to start checking them out. In general though, people set up SMSFs to provide them with an opportunity to control their own affairs; and they generally use the fund as one part of an integrated strategy to build assets that will provide their retirement income.