What is a SMSF?

What is a SMSF?

A SMSF is a self managed superannuation fund. A SMSF is a private super fund, managed by the parties to the super fund and regulated by the Australian Taxation Office (ATO).

Who can manage a SMSF?

A SMSF can have up to four parties to the self managed super fund and all parties must be trustees. If there is a corporate trustee, the parties will be directors. All trustees are responsible for any decisions made regarding the fund and for compliance with relevant laws.

Because all investment choices are the responsibility of the trustees, it is important to make sure that all decisions are in the best interests of the super fund.

SMSF trustees need to maintain the fund for the sole purpose of providing retirement benefits for the members or their dependents. If the trustees are using the SMSF as a means to gain early access to their money for purposes other than providing retirement benefits, there may be legal issues.

Government agencies that impact SMSFs

The main Australian Government agencies that you might have to deal with when setting up or managing a SMSF are:

  • The ATO – Administer the Superannuation laws for SMSFs
  • The Australian Securities & Investments Commission (ASIC) – Registers SMSF auditors and regulates financial services to protect consumers
  • The Department of Human Services – Receives and assesses applications for early release of super funds for compassionate reasons.

The ATO, as the main regulator, can provide guidance around duties and responsibilities as a trustee. They also monitor SMSFs to ensure you comply with your obligations. While the ATO will assess compliance to safeguard the retirement income, they won’t advise on or evaluate your investment choices.

A SMSF is considered a business entity. As such, the fund has its own Australian Business Number (ABN). All matters dealt with and decisions made on behalf of the fund should be recorded to avoid any issues arising out of audits or from poor financial results from investment decisions.


There are costs involved in setting up and managing your SMSF, so make sure that you have a sufficient amount of money to justify the initial and ongoing costs. Seek advice from the right advisors if you’re considering setting up a self managed super fund – a superannuation lawyer and an account will be most helpful.

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