Retirement schemes in every country are strong pillars of stability and security for every individual. It provides safety and acts as a sanctuary for the old citizens when they require such safety the most in their old age. The retirement program in Australia is called Superannuation. This retirement scheme was popularized by the “superannuation guarantee” brought out by Keating Labor during his time as the head of the government in Australia.
Superannuation is usually a fund where both the employer and the employee contribute some amount of money at fixed intervals of time. When the employee reaches a certain age then the entire lump sum is given to the employee. The Superannuation Industry (Supervision) Regulations of Australia has made it compulsory for every employer to contribute at least 9% of their employee’s income including bonus commission etc. this percentage was 3% at the time of its introduction and has gradually increased with time. While contributing in the Superannuation Fund is compulsory for the employers, it is not compulsory for the employees. The employees make contributions voluntarily in the fund.
A Self managed Super Fund is a superannuation fund which is usually maintained by a small group of individuals usually consisting of 5 members. These members act as trustees of the fund. It is obligatory that every member should be a trustee of the fund. The Self managed Super Fund is regulated by the Australian Taxation Office. When the super fund has corporate trustees then the members of the fund require to be directors of the same corporate trustee. In this system of superannuation, a member cannot be the employee of another member. As soon as there is an employer employee relationship established between two or more members, the fund becomes ineligible to be recognized as a superannuation fund.
A Self managed Super Fund has quite a few advantages that can be beneficial for you. They are-
– Tax savings
– Increased flexibility in choosing an investment or selection of an asset
– Allows you total control of the portfolio of your investment
– Great flexibility when it comes to using the pension income streams and also superannuation offers
– Freedom to transfer shares or securities which you own into the fund
– Chance to borrow limited resource if the asset is recognized by the SISA Act
Thus a Self managed Super Fund gives wide scope and advantage relating to your investment and pension funds. Due to this fund it has become widely popular amongst various corporate entities and individual groups of people as well.