How to setup a SMSF
  1. Obtain a Trust Deed – SMSF is a special type of trust and therefore requires a Trust Deed. The trust deed covers areas such as

    • The fund’s objectives
    • Who the trustees are
    • Who can be a trustee
    • How trustees are appointed or removed
    • Who can be a member
    • When contributions can be made
    • How benefits can be paid (pension or lump sum) within SIS Act requirements
    • When benefits can be paid
    • How to appoint professional advisers (such as an auditor)
    • The procedures for winding up the fund.
  2. Appoint a trustee – All members need to be trustees or director of the corporate trustee

  3. Sign the trustee declaration – This is to declare that the trustee understands the duties and responsibilities as trustee.

  4. Lodge election with regulator – After signing the Deed, the trustees need to lodge the election notice, within 60 days, with the regulator in order to become a regulated superannuation fund.

  5. Contribute Fund Assets – The trustees hold the fund’s assets in trust for the benefit of the members. Member can contribute fund assets in cash or transfer of assets. Member can also rollover the retail superfund to their SMSF.

  6. Nominate members – Record each member’s TFN

  7. Apply TFN, ABN, GST (optional) with ATO

  8. Open a bank account

Type of Superfund

There are two types of superfund can be set up:

1) Accumulation fund

It is a fund that accumulates members and employers earnings and contribution, less deduct any expenses and tax, so the benefits reflect the performance of the fund. Each member has a balance in the fund and the earnings are allocated to each member based on their proportional  interest.

2) Defined benefit fund

It is a fund that defines the benefit that each member will receive at a specific time. The amount is generally defined by a set formula and is paid at retirement. It is generally calculated according to length of service or years of membership in the fund, and average salary over the last few years before retirement. In contrast to an accumulation fund, members of a defined benefit fund do not suffer if the fund’s performance deteriorates – if returns decline the employer has to make up the difference so that payments to members are maintained at the predetermined level