An individual becomes a trustee when he sets up his funds in a self-managed superannuation fund. However, when a trustee has very less experience with handling matters for his SMSF superannuation, proper guidance is required. To understand the ways to handle a self-managed pension fund, one must know their liberties and responsibilities.
When a person chooses to invest his funds along with a group of people and set up SMSF plan, they ought to have some basic knowledge about it. This can be explained with the help of following characteristics of the superannuation plan.
- Also called as Do It Yourself (DIY) funds, it is clear that funds invested by a member will have the sole power over the trust fund alongside the other members.
- The upper limit for the number of members allowed in a self-managed superannuation funds is not more than four.
- An important clause to be noted about DIY funds is that no trustee of the fund can be an employee of another trustee in the same group, unless they are related.
- A member, who acts as a trustee to the funds as well, shall not be receiving any remuneration for his services done for the trust fund.
Once an individual has full grasp of the working of a superannuation fund, they can better understand the benefits. The strongest selling aspect of an SMSF plan is that it provides complete autonomy to its members. As funds are self-governed, the trustee has the independence to make investment decisions for his funds.
The funds held in a SMSF can be invested in areas, from real estate to share market by the trustee. Another significant advantage for investing in this plan is its affordability. Establishing and maintaining an SMSF is quite economical in comparison to other retirement plans or retail funds, which are usually very costly.
Along with benefits of independence with one’s fund, there also come a number of responsibilities for the trustees to perform. SMSF audits are one such obligation for any trustee. A member either can conduct regular auditing on his own or can even appoint a professional auditor or a chartered accountant for the same.
Today, large number of employed people is turning to SMSF plan for supporting a comfortable lifestyle during their retirement. The method of managing one’s retirement is quite popular among Australian citizens. With proper planning and support from various resources, one’s superannuation arrangements can be done smoothly.
The author is an experienced Content writer and publisher for Business Development. For more details about of Set Up SMSF, SMSF audits and SMSF Superannuation visit www.redwoodadvisory.com.au