The main objective of self-managed super funds is to provide additional income (or pension) that you can use until you reach retirement age. Pension fund accumulation is usually in the form of a lifetime pension guarantee. In Australia, there are several kinds of pension funds. The most common types are super self-managed funds (SMSF) and commercial pension funds.
The SMSF is usually created for a small number of people and is subject to the SMSF rules as founded by the Australian Tax Administration (ATO). The SMSF is normally authorized under the direction of an accountant and must be examined by an independent SMSF bookkeeper from Motion Accountancy to assure compliance with the rules and regulations of SMSF.
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Some people prefer self-managed super funds over industrial super funds because it gives them the flexibility and freedom to develop their own investment strategies.
When trying to understand the rules of the SMSF, the main task is to comply with the Trust Act provisions regarding the use of the SMSF. The Australian Pension Control Industry Act 1993 contains all the rules that pension funds must comply with. This includes general areas related to escrow, investing, management, funds and administrative accounts, inquiries, and complaints.
The law also regulates the work of pension funds and imposes sanctions on trustees if work rules are not followed.
Independent SMSF auditors to advise on the most effective strategies and monitor compliance are critical to the success of self-managed super funds.