We have given answers to some of
the most frequently asked question about DIY Super Funds, however should you
still have some question about managing your Super Fund, do not hesitate to
contact us. 1) What is DIY Superannuation
Fund? Superannuation is a trust fund, which “holds”
assets and invests to generate income for your retirement. By DIY you can
manage the investments yourself. The investments can include: Australian and
International Shares, Australian and International Bonds, Residential and
Business Property and Cash. There are many types of superannuation funds.
Currently you cannot choose the fund you want to join, your employer does
this for you. However if you have a DIY Super Fund, when starting new employment,
you could negotiate with your employer to contribute to your regulated DIY
Super Fund. Your employer may join you in any of these funds:
Employer funds - these are established
by employers, or a group of employers who join together to establish a larger
fund. Joint representatives of employers and employees control all monies.
Industry funds - these are controlled
by unions or groups of unions. Or sometimes funds are created for one particular
industry eg Cbus for Building Industry. Employers join this fund for all their
employees. Public sector funds - Government employees
are members of these funds. Admission to outside employees is restricted.
Public Offer Funds or Retail funds or
wrap accounts and master funds – These funds are the most common type.
Banks, Investment houses, Life Insurance companies etc, offers these funds.
Any employer can join this fund. These funds offer a wide variety of investment
options. They offer unlimited investment choice to members. From 1st July 2005 you can force your employer
to contribute your Superannuation in the fund of your choice including your
DIY Super Fund. When you retire, your superannuation savings
and other savings may be the only source for enjoying (surviving) your long
retirement years. It is unwise to trust future governments to look after non-tax
paying citizens. It is up to you on how comfortable retirement you want and
the type of lifestyle you want after you retire. Self-funded retirement is
our only hope. Based on a 5% return on investment, you will
need 20 times the annual income you will need in retirement. For example,
if you are hoping to retire on $50,000 Per Year, you will need $ 1 Million
at the time of retirement. A regulated DIY Super Fund is a fund that complies
with super legislation and regulations. Since year 2000 the Australian Tax
office is responsible for regulating all DIY Super Funds. There are many advantages of DIY Super Fund,
a complete list of advantages are listed in “Why DIY” section
of the website. Tax is paid on contributions & investment
earnings for a complete list please visit “Investment > Taxation”
section of the website. There are several ways you can contribute to
your DIY Super Fund. These include:
If you want to save for a comfortable and secure
retirement, you may need to make additional contributions to your DIY Super
Fund. Due to lower tax rate on income, it is the most tax effective way to
accumulate funds for retirement. Individuals with the highest marginal tax rate
of 47% should consider converting their own home loan to interest only home
loan instead of paying a high rate tax and than attempting to reduce the loan
balance. More is discussed on this strategy, in our free monthly seminars. This limit is based on your age (age-based limit).
These limits are listed on the Why DIY section of
the website. The superannuation guarantee legislation requires
all employers to provide super for their employees at a rate of 9% of their
base salary and some termination payments. There is a special definition of
Salary and some calculations are very complex. Some termination payments are
also subject to Superannuation. All contributions must be made to a complying
super fund including DIY Super Funds and are tax deductible to the employer. Your employer must contribute for your super;
if they do not contribute you can complain about it to ATO. Your employer
has to advise ATO every year about the contributions they have made for all
employees. The ATO can audit the employer’s accounts, and charge interest
on any outstanding Super payments, plus administrative fees. If you think your employer has not been paying
your super, first check with them. However, if you are still unsure, you can
ask the ATO to look into this matter If you are Most employers would only contribute to only
one fund for all employees for administrative purposes. Currently you cannot
force your employer to contribute to a fund of your choice or your DIY Super
Fund (although “Super choice legislation” has been on politicians
minds recently, but it is not yet law). You can check from your old employer’s
super fund, if they can accept contributions from your new employer and ask
your new employer if they will contribute to your old fund or your DIY Super
Fund. If your current employer cannot contribute to
your old fund, it is recommended that you rollover your existing balance to
your current employers Super Fund to save yourself two sets of administrative
& management fees. However, before you roll over your funds, make
sure you check that there are no entry and exit fees in the two funds and
the performance of the new fund is comparable to your existing fund. Some decide to roll over in their own DIY Super
Fund, whenever they change employment and keep existing employer Superannuation
Fund for Life Insurance purposes. You can have as many Super Funds as want; however,
you must remember that each fund you have will charge you their set of administrative
and management fees. Further each Super Fund will charge your account a premium
payment for compulsory Life Insurance. Many of us change jobs every five to six years
and as a result, many people have small superannuation accounts scattered
all over the place. To make the most of your super, it is recommended to "rollover"
or "consolidate" you’re various super accounts into one fund
– your current employers fund. This will help you maximise your earnings,
since you will be saving on fees and will need to manage one super account
only. You should receive regular statements from your
current employer-sponsored fund and all your previous funds detailing the
amount of money in each fund. If you are not receiving any statements, you
should contact your payroll department directly to obtain contact details
for your Super fund. For each employer previous to your current employer:
your previous employers should provide you with the name of the fund and their
contact details along with your member number. If the above exercise this proves unsuccessful,
the tax office has established a Lost Members Register for those who have
lost track of their super. You can check this register by clicking
here. You can access your monies when you retire, unless
you fulfil a condition of early release. If you are thinking of retiring before
age 55, you may need to consider how to fund your income requirements until
you can access your super. The amounts are to be preserved in your Super
Fund till a certain age. A Persons Preservation age depends on their Date
of Birth.
18) I am self employed,
Is Super good for me? If you are self-employed there is no one contributing
Superannuation for you. It is up to you to fund your retirement. If you want
to be self-funded retiree, it is essential to start a disciplined approach
to prepare for your retirement. If you want to reduce your taxable income and
pay less tax you can pay a tax-deductible contribution in a complying Super
fund. If you want to control your own Super you can establish a DIY super
fund. A DIY super fund is ideal for investors who want
greater control over the operation, management and investment strategy of
their super assets. However, to decide, you must first look at the advantages,
disadvantages section of the website and than go through the decision process
before you establish a DIY super fund. Single Member Super Funds Individual Trustee Super Funds are secure in an event of bankruptcy
(or in case of death), it would be devastating if a court was to rule that
no trust existed and this security was lost. Thus to have only one Individual
as Trustee and the same person to be the only Member of the Super Fund would
contravene “Trust Rules”. An additional individual trustee has to be appointed
for single member DIY Super Funds. If the single member does not have a corporate
trustee, the DIY Super fund must have two individuals as trustees. The member
must be the trustee with another person who is a relative
of the member; or any other person provided the member is not an employee
of that person. Corporate Trustee In the case of a single member DIY Super Fund,
the member can either be the sole-director of the corporate trustee or an
additional director may be appointed but the latter must be ‘linked’
to the single member of the fund and there are only two directors of corporate
trustee company. A DIY Super Fund must have fewer than five members. Individual Trustee Individuals can be trustees of super funds. However,
all members of a Self Managed Super Fund must be trustees of the fund and
also must be ‘linked’ to each other. Corporate Trustee If a corporate trustee is used, the directors
of the company are in reality are the trustees of the DIY Super Fund because
it is only through the direction of directors a company makes all decisions. All directors must be members of the DIY Super
Fund & all members must be directors of the corporate trustee and must
also be ‘linked’ to each other. Trustees have the primary responsibility to oversee
the operations of the super fund. Although the trustees would normally take
the advice of professionals, such as financial consultants and investment
specialists, they are ultimately responsible for the management and investments
of the fund. UC Services (we) can help you to establish a
DIY Super Fund. Please visit “Order” section of the website and
click on “Order Now”. You can either fill out an online application
form or download an order form, which you can fill out and send to us.
1) What is DIY Superannuation Fund?
2) How many types of super funds are out there?
3) How much Superannuation Do I need when I retire?
4) Does a Government Body regulate DIY Super Fund?
5) Why should I contribute to my DIY Super Fund?
6) How much tax does my DIY Super Fund pay?
7) How can I contribute to my DIY Super Fund?
8) What are the benefits of contributing to my DIY Super Fund?
9) What is the maximum amount I can Salary Sacrifice?
10) How much is the minimum my employer has to contribute?
11) What can I do if my employer does not contribute any Super
for me?
12) What if I work part-time?
13) What happens when I change my job?
14) How many Super Funds am I allowed to have?
15) How do I know how many Super Funds I have?
16) If it is my Super, when can I get it?
17) If I say that I am retired today, can I get my super out?
18) I am self employed, Is Super good for me?
19) Is a DIY super fund right for me?
20) Who can be a trustee of a DIY super fund?
21) What are the trustees responsibilities?
22) How do I set up a DIY super fund?
2) How many types of super funds are out there?
3) How much Superannuation Do I need when I retire?
4) Does a Government Body regulate a DIY Super Fund?
5) Why should I contribute to my DIY Super Fund?
6) How much tax does my DIY Super Fund pay?
7) How can I contribute to my DIY Super Fund?
8) What are the benefits of contributing to my DIY Super
Fund?
9) What is the maximum amount I can Salary Sacrifice?
10) How much is the minimum my employer has to contribute?
11) What can I do if my employer does not contribute
any Super for me?
your employer is not required to pay super for you,
otherwise even if you work part time, your employer must pay Superannuation
into a complying fund for you.
13) What happens when I change my job?
14) How many Super Funds am I allowed to have?
15) How do I know how many Super Funds I have?
16) If it is my Super, when can I get it?
17) If I say that I am retired today, can I get my super
out?
Date Of Birth
Preservation Age
Before 1st July 1960
55
1 July 1960 – 30th June 1961
56
1 July 1961 – 30th June 1962
57
1 July 1962 – 30th June 1963
58
1 July 1963 – 30th June 1964
59
After 30th June 1964
60
19) Is a DIY super fund right for me?
20) Who can be a trustee of a DIY super fund?
Multiple Member Super Funds
21) What are the trustee’s responsibilities?
22) How do I set up a DIY super fund?
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Universal Consultancy
Services
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Phone: (02) 9638 3966 Fax: (02) 9638 3060
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Email: sales@diysuperfund.com.au
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