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Your FAQs
A Self Managed Super Fund (SMSF) performs the same role as other super funds by investing contributions and making them available to members on retirement, however the members of SMSFs are also the trustees and therefore control where their contributions are invested and the payment of their benefits.
You may decide to establish an SMSF for the following reasons:
• control,
• flexibility in investment decisions,
• estate planning; and
• cost efficiency.
Self Managed Super Funds(SMSF) can invest in a wide range of wealth creating investments, as long as they pass
the sole purpose test.
The sole purpose test is based on the premise that superannuation benefits provide for a person's retirement, and any
investment decision must be clearly made for future rather than present benefit. This means that a self managed super fund
must be maintained for the sole purpose of providing benefits to members upon their retirement, or to their dependants
if a member dies before retirement.
So what exactly can and can't my Self Managed Super Fund invest in?
A Self Managed Super Fund can:
• make investment decisions that will generate income/wealth for your retirement.
A Self Managed Super Fund can't:
• run a business within your fund
• provide financial assistance to friends or family
• make investments to help someone else out
• buy art as a fund investment and then hang it on your wall
• buy wine as a fund investment and then drink it
• buy jewellery as a fund investment and then wear it
• buy art, wine or investment jewellery for capital growth or to rent out to unrelated parties
• use any of the assets of your fund for your own personal use or allow members or related parties to use those assets; and
• borrow money for personal use.
How much do I need to start Self Managed Super Fund?
Ideally your superannuation balance should be at a minimum $250,000 to establish a Self Managed Super Fund.
How difficult is it to run my own Self Managed Super Fund?
Running a Self Managed Super Fund individually can be very time consuming and a complex task. That's why we call them JBS Managed Super Funds. For a very competitive ongoing fee we take the hassle from you, by preparing and providing the following:
• Establishment of the fund including:
o Provision of superior Trust Deed
o Set up of Corporate or Individual Trustee's
o Completion and Lodgement of Initial Compliance Documents
• Detailed Investment Strategy
• Investment Guidelines
• Binding Death Benefit Nominations
• Pension Strategies and Minutes
• Compliance Documents for ongoing maintenance of the Fund
• Trustees Responsibilities
• Administration
• Informing of New Investment Opportunities
My employer chose the super fund where my superannuation is paid. Can I elect to have my superannuation paid into my Self Managed Super Fund?
Yes, you can. From the 1st July 2005 employees are able to choose where they want their superannuation paid.
Whether it is into a Self Managed Super Fund or a different retail fund, you have the choice.
The first meeting is at our cost. We will guide you through our processes that help you take a 'big-picture' look at where you
are now and where you want to be financially.
We discover your life values, those things that are important to you. We examine each of these values, most of that
are unknown until the process starts.
We determine as much financial information as possible surrounding the family as well as any plans or strategies
already in place. The purpose of this information is to develop a blueprint for you.
Why is Income Protection important?
Your ability to earn an income is your greatest asset. The mortgage, school fees, living expenses and bills don’t stop
when you cannot work due to injury or illness. Income Protection Insurance will give you a monthly income when you
are able to work due to an illness or injury.
We recommend that your implemented portfolio is reviewed on a regular basis to ensure that it continues to meet your
financial goals and objectives. Also to take into consideration any significant changes to your personal situation and any
changes to economic and market conditions which may impact upon the performance of your investments. A review
would need to take into consideration any changes to:
* The economic environment
* Investment Sector Performance
* Your taxation position
* Social Security issues/changes
* Other available investments
* Taxation position of investments
* Fund Manager performance
* Investment performance; and
* Legislation.
The short answer is yes. Jenny Brown, David Novotny & Glenn Malkiewicz hold ASX Accreditation in providing
advice in Direct Equities.
What are the tax concessions?
When members are accumulating money for retirement,
* A 15% tax rate applies to income of the fund, including contributions for which the payer has claimed a tax deduction.
* Realised capital gains on investments held more than 12 months are taxed at an effective rate of 10%.
If you manage your own fund, tax can be even lower through the use of franking credits and the offsetting of any capital losses.
When members are receiving an income from the fund in retirement,
* The fund is tax exempt on income and realised capital gains.
* The member is aged 55-59, he/she receives a 15% tax offset on any taxable pension. Part of the pension can be tax exempt.
* The member is aged over 60, any benefits (lump sum or pension) drawn from a taxed source is tax free and will not effect the members personal tax return.
This is a plan for the strategic investment of the fund. It is not a decision in relation to particular assets but the overall
strategy of what the fund intends to achieve.
The strategy should give regard to:
* maximising returns to members having regard to the risk associated with each investment,
* diversification across asset classes such as shares, property and fixed interest, and
* the requirements to pay benefits, tax and costs of the fund.
A member cannot receive his/her preserved benefits unless one of the following criteria is met:
* retirement;
* death;
* permanent incapacity;
* permanent departure from Australia (temporary residents only);
* severe financial hardship;
* compassionate grounds.
A person will be considered to be retired if:
* he or she has reached preservation age, ceased employment and does not intend to be gainfully employed in the future;
* ceased employment after reaching age 60;
* At age 65 preserved benefits become unrestricted non preserved benefits and can then be accessed at any time.
The preservation age is 55 years for members born prior to 1 July 1960. This is increased by one year for each year a
member is born after this date with a maximum of 60 years applying to members born after 30 June 1964.
The exception to this rule is the commencement of a transition to retirement income stream after the member has attained
preservation age.
Yes, JBS Financial Strategists can assist you with all your salary packaging requirements via our salary packaging partner Income Essentials
Salary packaging is the legal restructuring of your remuneration with the objective to maximise non-cash benefits plus net take-home pay to gain better financial benefit from your remuneration. Effectively, this is equivalent to a salary increase where your after-tax income is increased at no additional cost to your employer.
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JBS Financial Strategists Pty Ltd | Level 7, 24 Albert Road, South Melbourne Victoria 3205. Tel 03 8677 0688 Fax 03 8677 0600 Email strategies@jbsfinancial.com.au
Advice on salary packaging is available from our partners Income Essentials: www.incomeessentials.com.au
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Self Managed Superannuation, Self Managed Super Fund, DIY Super, DIY Superannuation, Financial Planning and Super,
Self Managed Superannuation Australia, Self Managed Super Fund Australia
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