Money
Issue No. 15 - February/March 2004
Self Managed Super
by Tony Catt
Self—managed superannuation funds provide excellent opportunities for their members. Unfortunately, the extent of these opportunities is often overlooked.
Self—managed funds can provide highly flexible ways to minimise tax throughout the members’ working lives and retirement (including paying pensions), protect assets from creditors and plan deceased estates. Significantly, up to four members of the same family may join the same self—managed fund to minimise costs, increase their investing power, and combine their retirement planning. (Superannuation law places a four—member limit on self—managed funds.) Married couples are, of course, often members of the same fund.
The consistent popularity and asset growth of Australia’s 267,000 self—managed funds is outstanding. The Australian Prudential Regulation Authority’s research shows that assets in self—managed funds are continuing to grow rapidly. Self—managed funds have 495,000 members and almost $110 billion in assets. These funds hold about twice the total assets of both corporate and industry funds, and slightly more than government funds.
The set—up decision
Before deciding to establish a self—managed fund, you should discuss with an adviser such factors as the minimum amount of capital you should invest, the fund’s investment strategy, how investments will be chosen, how the fund’s regulatory returns will be filed and what steps are necessary to create a new fund.
You can arrange for a specialist company to undertake much of your fund’s administrative work——such as having the fund audited as required by law, preparing and filing regulatory returns, and ensuring necessary paperwork is organised. Administrative firms deal with a large number of returns, which keeps their charges to a minimum.
An issue that often arises when considering the creation of a self—managed fund is the minimum amount of capital that is initially considered ...
