What is a self-managed super fund?
A small or DIY (do it yourself) superannuation fund is an individual, family or small business based fund of one to four members. The DIY fund is a separate legal entity. This is what makes having a DIY fund different to holding a member account within a larger superannuation master trust or retail superannuation product. Because of their small size, and the closeness of the relationship between the fund members and the fund trustees, the fund members have a far greater say in how the funds operate. DIY funds form the fastest growing segment of the Australian superannuation industry. Australian Prudential Regulation Authority Statistics of January 2003 show 246,000 small funds with a total of 430,000 member accounts holding total assets of $99 billion. On average self-managed super funds have 1.75 members, with a member account average balance of $230,000. (Source: The Association of Superannuation Funds of Australia Limited).
A self managed super fund performs the same role as other super funds, by investing contributions and making them available to members on retirement. The key difference is that the members of self managed super funds are also the trustees, who therefore control where their contributions are invested and the payment of their benefits. A self managed super fund allows you to decide what you invest in and when your benefits are paid, as long as you comply with superannuation laws. We recommend that you speak with a qualified financial planner to work out whether setting up a self managed super fund is ideal for your situation.
