What is an SMSF?

What is an SMSF?

Self-managed superannuation funds (SMSFs) have become a popular choice for Australians who wish to take on the responsibility and control of managing their retirement savings.

SMSFs perform the same role as other superannuation funds, by investing contributions and making them available to members on retirement. The difference is, generally, that the members of SMSFs are also the trustees – they control the investment of their contributions and the payment of their benefits. With all members being trustees, they are in a position to ensure their interests as members, are protected.

To be an SMSF, a superannuation fund must comply with the definition contained in Section 17A of the Superannuation Industry (Supervision) Act 1993 (SIS Act).

Key requirements are:

  • It has a trust deed that meets the requirements of the SIS Act
  • The fund has no more than six members (Prior to 1 July 2021, membership was limited to only 4 people)
  • Each member of the fund is a trustee or director of a company that is trustee of the fund
  • No member of the fund is able to be an employee of another member, unless the members concerned are relatives
  • No trustee of the fund receives any remuneration for their services as a trustee
  • Money and assets of an SMSF must be held separately from money and assets belonging to SMSF members
  • Special trustee rules apply for funds with single member funds
  • Children can be members of an SMSF, but special rules exist