1) What is DIY Superannuation Fund?
2) How many types of super funds are out there?
3) How much Superannuation Do I need when I retire?
4) Does a Government Body regulate a DIY Super Fund?
5) How can I contribute to my DIY Super Fund?
6) What are the benefits of contributing to my DIY Super Fund?
7) What is the maximum amount I can Salary Sacrifice?
8) How much is the minimum my employer has to contribute?
9) What can I do if my employer does not contribute any Super for me?
10) What if I work part-time?
11) How many Super Funds am I allowed to have?
12) How do I know how many Super Funds I have?
13) If it is my Super, when can I get it?
14) If I say that I am retired today, can I get my super out?
15) I am self employed, Is Super good for me?
16) Is a DIY super fund right for me?
17) Who can be a trustee of a DIY super fund?
18) What are the trustee's responsibilities?
19) How do I set up a DIY super fund?

 

1) What is DIY Superannuation Fund?

Superannuation is a trust fund, which “holds” assets and invests to generate income for your retirement. By DIY you can manage the investments yourself. The investments can include: Australian and International Shares, Australian and International Bonds, Residential and Business Property and Cash.

2) How many types of super funds are out there?

Employer funds - these are established by employers, or a group of employers who join together to establish a larger fund. Joint representatives of employers and employees control all monies.

Industry funds - these are controlled by unions or groups of unions. Or sometimes funds are created for one particular industry eg Cbus for Building Industry. Employers join this fund for all their employees.

Public sector funds - Government employees are members of these funds. Admission to outside employees is restricted.

Public Offer Funds or Retail funds or wrap accounts and master funds – These funds are the most common type. Banks, Investment houses, Life Insurance companies etc, offers these funds. Any employer can join this fund. These funds offer a wide variety of investment options. They offer unlimited investment choice to members.

From 1st July 2005 you can force your employer to contribute your Superannuation in the fund of your choice including your DIY Super Fund.

3) How much Superannuation Do I need when I retire?

When you retire, your superannuation savings and other savings may be the only source for enjoying (surviving) your long retirement years. It is unwise to trust future governments to look after non-tax paying citizens. It is up to you on how comfortable retirement you want and the type of lifestyle you want after you retire. Self-funded retirement is our only hope.

Based on a 5% return on investment, you will need 20 times the annual income you will need in retirement. For example, if you are hoping to retire on $50,000 Per Year, you will need $ 1 Million at the time of retirement.

4) Does a Government Body regulate a DIY Super Fund?

A regulated DIY Super Fund is a fund that complies with super legislation and regulations. Since year 2000 the Australian Tax office is responsible for regulating all DIY Super Funds.

5) How can I contribute to my DIY Super Fund?

There are several ways you can contribute to your DIY Super Fund. These include:

• Salary sacrifice,
• Undeducted contributions,
• Spouse contributions,
• CGT rollover relief,
• Claiming a tax deduction,
• Rolling over redundancy and bonus employer payments

6) What are the benefits of contributing to my DIY Super Fund?

If you want to save for a comfortable and secure retirement, you may need to make additional contributions to your DIY Super Fund. Due to lower tax rate on income, it is the most tax effective way to accumulate funds for retirement.

7) What is the maximum amount I can Salary Sacrifice?

This limit is based on your age (age-based limit).

8) How much is the minimum my employer has to contribute?

The superannuation guarantee legislation requires all employers to provide super for their employees at a rate of 9% of their base salary and some termination payments. There is a special definition of Salary and some calculations are very complex. Some termination payments are also subject to Superannuation.

All contributions must be made to a complying super fund including DIY Super Funds and are

9) What can I do if my employer does not contribute any Super for me?

Your employer must contribute for your super; if they do not contribute you can complain about it to ATO. Your employer has to advise ATO every year about the contributions they have made for all employees. The ATO can audit the employer's accounts, and charge interest on any outstanding Super payments, plus administrative fees.

If you think your employer has not been paying your super, first check with them. However, if you are still unsure, you can ask the ATO to look into this matter

10) What if I work part-time?

If you are

• Earning less than $450 a month (for any month where you earn less than $450).
• Under 18 years of age and don't work more than 30 hours per week.
• Age 70 and over.
• Primarily doing work of a domestic or private nature for 30 hours per week or less.
• Non-resident employees who are paid for work done solely outside Australia.

your employer is not required to pay super for you, otherwise even if you work part time, your employer must pay Superannuation into a complying fund for you.

11) How many Super Funds am I allowed to have?

You can have as many Super Funds as want; however, you must remember that each fund you have will charge you their set of administrative and management fees. Further each Super Fund will charge your account a premium payment for compulsory Life Insurance.

Many of us change jobs every five to six years and as a result, many people have small superannuation accounts scattered all over the place. To make the most of your super, it is recommended to "rollover" or "consolidate" you're various super accounts into one fund – your current employers fund. This will help you maximise your earnings, since you will be saving on fees and will need to manage one super account only.

12) How do I know how many Super Funds I have?

You should receive regular statements from your current employer-sponsored fund and all your previous funds detailing the amount of money in each fund. If you are not receiving any statements, you should contact your payroll department directly to obtain contact details for your Super fund.

For each employer previous to your current employer: your previous employers should provide you with the name of the fund and their contact details along with your member number.

If the above exercise this proves unsuccessful, the tax office has established a Lost Members Register for those who have lost track of their super.

13) If it is my Super, when can I get it?

You can access your monies when you retire, unless you fulfil a condition of early release. If you are thinking of retiring before age 55, you may need to consider how to fund your income requirements until you can access your super.

14) If I say that I am retired today, can I get my super out?

The amounts are to be preserved in your Super Fund till a certain age. A Persons Preservation age depends on their Date of Birth.

Date Of Birth	Preservation Age
Before 1st July 1960	55
1 July 1960 – 30th June 1961	56
1 July 1961 – 30th June 1962	57
1 July 1962 – 30th June 1963	58
1 July 1963 – 30th June 1964	59
After 30th June 1964	60

15) I am self employed, Is Super good for me?

If you are self-employed there is no one contributing Superannuation for you. It is up to you to fund your retirement. If you want to be self-funded retiree, it is essential to start a disciplined approach to prepare for your retirement.

If you want to reduce your taxable income and pay less tax you can pay a tax-deductible contribution in a complying Super fund. If you want to control your own Super you can establish a DIY super fund.

16) Is a DIY super fund right for me?

A DIY super fund is ideal for investors who want greater control over the operation, management and investment strategy of their super assets. However, to decide, you must first look at the advantages, disadvantages section of the website and than go through the decision process before you establish a DIY super fund.

17) Who can be a trustee of a DIY super fund?

Single Member Super Funds

Individual Trustee

Super Funds are secure in an event of bankruptcy (or in case of death), it would be devastating if a court was to rule that no trust existed and this security was lost. Thus to have only one Individual as Trustee and the same person to be the only Member of the Super Fund would contravene “Trust Rules”.

An additional individual trustee has to be appointed for single member DIY Super Funds. If the single member does not have a corporate trustee, the DIY Super fund must have two individuals as trustees. The member must be the trustee with another person who is a relative of the member; or any other person provided the member is not an employee of that person.

Corporate Trustee

In the case of a single member DIY Super Fund, the member can either be the sole-director of the corporate trustee or an additional director may be appointed but the latter must be ‘linked' to the single member of the fund and there are only two directors of corporate trustee company.

Multiple Member Super Funds

A DIY Super Fund must have fewer than five members.

Individual Trustee

Individuals can be trustees of super funds. However, all members of a Self Managed Super Fund must be trustees of the fund and also must be ‘linked' to each other.

Corporate Trustee

If a corporate trustee is used, the directors of the company are in reality are the trustees of the DIY Super Fund because it is only through the direction of directors a company makes all decisions.

All directors must be members of the DIY Super Fund & all members must be directors of the corporate trustee and must also be ‘linked' to each other.

18) What are the trustee's responsibilities?

Trustees have the primary responsibility to oversee the operations of the super fund. Although the trustees would normally take the advice of professionals, such as financial consultants and investment specialists, they are ultimately responsible for the management and investments of the fund.

19) How do I set up a DIY super fund?

UC Services (we) can help you to establish a DIY Super Fund. Please visit “Order” section of the website and click on “Order Now”. You can either fill out an online application form or download an order form, which you can fill out and send to us.