Considering Starting a Fund?
We have prepared the following guide for you.
Take your time
Many people are considering starting up a new fund. From the outset, we encourage you to take your time, and carefully decide if you are prepared to commit the time and energy to ensuring you get the most out of your fund. Importantly, you need to consider why you are starting up the fund. Is it to enable you to buy direct property? Buy shares? To save costs on external manager fees? Remember, superannuation is the primary retirement vehicle for many Australians, and should therefore be treated as a major decision.
Consider the tax benefits, accessibility & other considerations
The government has long supported superannuation as a method to encourage people to save for their own retirement. The incentive to save through superannuation is through a generous tax environment. Superannuation is taxed at a rate of 15% on contributions and earnings. If you are over 60 years of age, any pension paid to you is not taxable in your name. This is very generous when compared with the personal progressive tax rates and company tax rates.
In return for this generous tax structure, the government requires the money to be left until retirement age, and there are several rules in this regard. To further ensure the safety of retirement funds, the government also has some specific rules and obligations for trustees. The use of debt is an example of this. It should always be remembered that superannuation is a vehicle to encourage the accumulation of wealth for retirement and should not be used for other purposes.
The Education section provides an overview of SMSF, superannuation tax, accessibility and other considerations relating to running a fund.
Members, Responsibilities & Duties
The unique features of SMSFs are that each member must be a trustee and there can be no more than four members/trustees. Trustees are responsible for protecting the superannuation assets, and as such are responsible to members in the eyes of the law (regardless of the trustees also being the members). This is different from a standard superannuation fund where you are a member, but another individual or organisation is appointed as a trustee. You should therefore be aware that setting up a SMSF increases your responsibilities as new trustee(s).
An SMSF may not be appealing if you desire to appoint more than four member/trustees to the fund. Members/trustees can leave the fund, opening up the opportunity to add new members/trustees, but the rule is no more than four at any given time.
Running your own fund does mean some additional work on your behalf, however the aim of Rivkin Super is to do as much of this for you as possible. We will work with you through the year to keep the fund running smoothly, and address any issues as they arise. Our team will help you with documentation such as change of trustees and providing instructions on information required. We will coordinate the preparation of financial statements, tax returns and audits, along with actuarial certificates for pensions.
Exit costs of existing fund
If (like most people) you already have an existing superannuation account through a fund manager, industry fund or other source and you wish to ‘rollover’ these funds to a new SMSF, you should first check whether there any exit fees involved. Most modern superannuation providers do not charge an exit fee; however, some older funds may have a cost. These costs can be obtained by contacting your existing superannuation provider.
Weigh up the costs & benefits
Costs play a big part in determining investment performance. We encourage you to consider all of the costs involved, and weigh those against the benefits of your running your own fund.
Click here for the complete Product and Price Schedule.
Consider alternative providers
Different SMSF providers will have different benefits and features, and it is important to consider what each has to offer. We have designed Rivkin Super to cater to a range of requirements. The standard package is aimed at people looking to invest in a defined range of assets including cash, shares and some term deposits. This helps keep costs very low. The premium package appeals to those looking to invest in a broader range of assets and/or a fund in ‘pension’ mode. Finally, we offer bespoke services where we will tailor a package specific to your needs.