Decision to set up a SMSF
The decision to establish a Self Managed Superannuation Fund (SMSF) is not easy. This decision requires considerable aforethought but any delay in setting up SMSF allows money in superannuation to build up to a level where the maintenance and set up SMSF costs are effective and sustainable. As a result there is no need to rush your decision. The second consideration is to be mindful to ensure that the “Self” in SMSF is attainable as, without members attending to the administration themselves, the costs would probably be prohibitive. Were one to require professional advisers to establish and maintain the fund then a SMSF may not be appropriate as it may not remain const effective. As a result there had been considerable planning and thought about these matters ahead of time.
Costs of Setting up SMSF
As my funds within superannuation amounted to just over $250,000, then on an annual basis, the administration costs were amounting to at least $5,900 per annum. What were the the steps in establishing the fund and what were the costs and process.
The ease with which one is able to establish the fund is remarkable. Online there are many service providers but cleardocs.com was chosen for a suite of Superannuation (SMSF) documents. Their website included an interface to ASIC to register a corporate trustee as this option was chosen in our circumstances. This choice of a corporate trustee is the subject of a separate post. The cost for the founding legal documents of the Superannuation Trust and Company structure was $397 with a further $469 for ASIC’s fee for the registration of the corporate trustee.
Steps setting up SMSF
The cleardocs website calls for:
- the names of the members of the fund,
- the trustee company name, addresses, and
once provided the Superannuation Trust Documentation Package, consisting of all legal documents and pre-prepared correspondence is provided. With the clear guidance online, the detail is easily completed and within minutes the documentation for structure is provided with confirmation of registration of the trustee company instantaneous.
In addition, a Superannuation Fund Establishment Kit is provided. This is very useful and clearly written, setting out all the steps for the proper completion and signing of the documents, and detailing other obligations.
Having received notification of establishment of the corporate trustee then once the trust documents were signed our SMSF was established. As a result of electronic messaging between ASIC and the Australian Tax Office the fund was also registered with the ATO. This process was simple, very comprehensive and easy navigate and was cost effective.