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A Self-Managed Super Fund (SMSF) is a private superannuation fund that you manage yourself, giving its members, direct control over how retirement savings are invested. Unlike retail or industry super funds, SMSFs are typically run by their members, who are also the trustees. This means, as a trustee you are responsible for making investment decisions and ensuring the fund complies with laws such as superannuation and tax. An SMSF can have up to six members, and each member must be a trustee or a director of a corporate trustee.
SMSFs operate under a trust structure. Trustees manage the fund’s assets for the sole purpose of providing retirement benefits to members.
Some of the responsibilities of a trustee are:
With an SMSF, you decide where your money goes and how you invest your money, providing you with some of the following benefits:
As much as there are benefits to an SMSF there are also risks and responsibilities that trustees should consider, such as:
Learn more around the roles and responsibilities of a trustee
An SMSF can offer flexibility and control, but it’s not for everyone. It is generally suited to individuals who are financially literate, have time to manage their fund, and are confident in meeting the legal obligations of running an SMSF. If you’re unsure, consider speaking with a licensed professional, such as a financial or tax adviser who specialises in SMSFs. (Refer to ATO for more information)
To setup an SMSF usually involves quite a few steps. Below are some steps that you should consider.
Decide on the structure: Choose between individual trustees or a corporate trustee.
Appoint trustees: All trustees must be eligible and sign a trustee declaration.
Create a trust and trust deed: The trust deed sets out the fund’s rules.
Register with the ATO: Apply for an ABN and TFN.
Open a dedicated SMSF bank account: Keep fund assets separate from personal accounts.
Get an Electronic Service Address (ESA): Required for SuperStream contributions.
Develop an investment strategy: Must consider risk, diversification, liquidity, and insurance.
Learn more about investment options
Understand ongoing obligations: Record keeping, annual audits, and reporting
Ongoing costs usually include accounting, auditing, ATO supervisory levy, and investment-related expenses. According to ATO Interaction tag, in 2022/2023, the average (mean) SMSF fund incurred just over $7,000 worth of operating expenses. This is however dependent on the fund's complexity.
To be a trustee or director of a corporate trustee in a Self-Managed Super Fund (SMSF), you should:
If a member is under 18 or has a legal disability, a legal personal representative (LPR) can act on their behalf.
SMSF Lookup is an online tool provided by the Australian Government that allows you to check the registration and compliance status of a Self-Managed Super Fund (SMSF). It’s used by employers, other super funds, and service providers to verify whether an SMSF is eligible to receive contributions and rollovers.
You can access it at: https://superfundlookup.gov.au
Some of the things trustees are responsible for are:
Some of the administration requirements are:
Every year, by an approved SMSF auditor
Breaches can result in penalties, loss of tax concessions, or disqualification of trustees. The ATO may require rectification or can take enforcement action.
SMSFs can invest in a wide range of assets, including:
An investment strategy is a written plan outlining how the fund will invest to meet members’ retirement goals. It should consider risk, diversification, liquidity, and insurance, and be reviewed regularly.
All contributions and payments would go through the SMSF’s bank account. Keep detailed records of all transactions for compliance and audit purposes.
Yes. SMSFs needs to have a dedicated bank account to manage contributions, investment income, and expenses. This account needs to be separate from personal or business accounts.
Once your SMSF is established and registered, you can open a bank account in the fund’s name. You’ll need the fund’s ABN, trust deed, and trustee details.
Trustees should consider insurance for members as part of the fund’s investment strategy. SMSFs can hold life, TPD, and income protection insurance. In deciding on insurance, consider particular circumstances of the SMSF and its members.
SMSFs can be difficult to navigate, especially around the compliance requirements on trustees. Due to this some SMSF trustees engage professionals for accounting, audit, and investment advice to ensure compliance and effective management. Refer to ATO for a list of specialists
SMSFs must lodge an annual return with the ATO, including financial statements and an independent audit report. Most trustees use an accountant to prepare and lodge the return.
This page is intended to provide general information of an educational nature only. The information may include general advice but does not take into account your individual objectives, financial situation, needs or tax circumstances, and so you should consider the appropriateness of the advice having regard to your circumstances before acting on it. Where applicable, you should obtain and read the relevant Product Disclosure Statement (PDS) and other important disclosure documents before making a decision about acquiring or continuing to a product. You should consider seeking independent professional financial, tax and/or legal advice before making any decision based on this information.
The above information is not tax advice. Taxation laws are complex and subject to change. Commonwealth Bank does not provide tax (financial) advice under the Tax Agent Services Act 2009 (Cth). You should consider seeking independent tax advice from a registered tax agent, accountant or adviser before you make any decisions based on this information.
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