Briefly, a DIY Super fund is as a pool of assets, such as
cash and shares and property that you have total control over. The pool
of assets represents the amount of superannuation that you have accumulated
over your working life. The assets instead of being in your name are in
the name of your DIY Superfund. Your employer could contribute to this pool
or you could help it grow by Salary Sacrifice for your retirement years. Your current super benefits could be where your employer chooses
to contribute. There are several types of funds such as
- Publicly offer funds like AMP, Colonial, ING etc
- Industry super fund such as for retail workers REST etc
Your Super Fund should send you annual statements stating
- Opening balance
- Additions (new money - contributions)
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Income or Loss (addition or deduction)
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Closing Balance
Fact is that this is your money and you are paying someone to invest it for you. Some funds give you a limited choice in investment decisions, although the fund manager makes most day-to-day decisions. Decisions like what investment to make, when to make, where to make are made for you.
By joining such a fund, you give this decision making right to the fund manager in lieu of management fees to be paid by you.
You may pay an entry fee to join the fund and as an industry average may be paying 1.5% of super balance as management fees to the fund manager. Hence if your family fund balance is $100,000 your family may currently be paying $1,500 or more to various fund managers to look after your money.
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Should you decide to set up your own DIY Super fund all your existing balance can be transferred in your DIY Super funds name and you as trustee can make all the investment decisions. We can assist you in transferring your current balances.
- Once the current balances are rolled over in your fund, you have total control over the funds bank account (you have the cheque book). And can invest the funds as you (as trustee) see fit with the aim of providing retirement benefits for the members of the fund (i.e. you and your family members).
- We simply establish your DIY Superfund and do not manage or have any control over your super benefits.
- To ensure that your DIY Super Fund adheres to the various investment and tax laws and complies with all legislative requirements, you appoint us as administrators who prepare accounts, tax & related returns of your DIY Super fund. We ensure that your fund is a complying fund and is concessionally taxed at all times.
- Investment review
Trustees must review on a regular basis the investments of the fund and implement a strategy, which the Trustees believe will maximise the returns of the fund. Any strategy implemented must be consistent with the investment objectives of the fund.
It is recommended that such a review be conducted:
- whenever the members of the fund change;
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Establishing whether the members need insurance cover e.g. insurance policy for death, to be taken out by the fund ensuring a tax effective payment for the Super fund.