www.esuperfund.com.au

How a Self Managed Super Fund (SMSF) Works


Step1
 

Setup a SMSF with ESUPERFUND

A SMSF is your own personal Superannuation Fund that gives you total control over how your Super Benefit is invested. A SMSF is ideal for the DIY Investors who prefer to make their own Investment Choices for their retirement rather than leave their Superannuation to be invested by others. There is no minimum amount required to setup a SMSF. If you are ready to establish a new SMSF, ESUPERFUND can attend to the all aspects of the setup process for you. More importantly under our current promotional offer it is absolutely FREE to establish a SMSF with ESUPERFUND. Find out more about the process to set up your SMSF.


Step2
 

Transaction Bank Account is established for your SMSF

When you become a client of ESUPERFUND, a Transaction Bank Account is established for your SMSF which will act as the Transaction Account for your SMSF. The Transaction Bank Account must be used for your SMSF. At the end of each financial year, the Bank will send to ESUPERFUND an annual data file of all your SMSF transactions. This enables our office to attend to your SMSF's annual compliance obligations. No bank records are required from you each year as we already have access to the data. It is important to understand that only electronic data files are provided to ESUPERFUND. We have absolutely no access to your Transaction Bank Account and cannot actually login to your Bank Account to access the required data. Find out more about the Transaction Bank Account.


Step3
 

Share Trading Account is established for your SMSF

When you become a client of ESUPERFUND a Share Trading Account will be established for your Fund enabling you to trade CHESS Sponsored Australian Shares online.  The Preferred Brokers to invest in Australian Shares are CommSec and EBROKING. Documentation to establish your Preferred Broker is included with the documentation forwarded to you when you submit your online application to establish an SMSF. By using our Preferred Brokers to invest in Australian Shares, ESUPERFUND is able to electronically access the Broker Data for your SMSF in order to attend to the SMSF Annual Compliance Requirements. No Broker Data records are required from you each year as we already have the data.  It is important to understand that only electronic data files are provided to ESUPERFUND. We have absolutely no access to your Broker Account and cannot actually login to your Broker Account to access the required data.   You are permitted to establish additional Broker Accounts for your SMSF in addition to the Preferred Broker selected to invest in Australian Shares (CommSec or EBROKING). However if you establish additional Brokers for your SMSF with Non Preferred Brokers to invest in Australian Shares, data will not be accessible by ESUPERFUND and you will need to source and provide this data to ESUPERFUND annually.  Find out more about the Preferred Brokers here


Step4
 

Rollover your Existing Super Benefit to your SMSF Bank Account

Once your SMSF has been established you can apply to your current Superfund to transfer your existing Super Benefit to your new SMSF.  You cannot apply to Rollover your existing Super Benefit until ESUPERFUND has mailed to you the "Final Establishment Package" which will include all your SMSF setup details including the ABN. Learn more about the Rollovers process.


Step5
 

Commence making Contributions to your SMSF Bank Account

Once the SMSF has been established you can also commence making Contributions to the SMSF. All Contributions must be deposited into the Transaction Bank Account established for your SMSF. There is only one Transaction Bank Account established for your SMSF and all Members must deposit Contributions into the same Transaction Bank Account. It is unnecessary and administratively inefficient to have a separate Transaction Bank Account for each Member. Each Contribution and Contribution Type must be allocated to a specific Member as part of the annual compliance process. This is a legal requirement. Typically the Member making the Contribution and the Contribution Type will be detailed on the Transaction Bank Account Bank Statement. To the extent that the narration on the Bank Statement is insufficient, you will be asked to confirm on whose behalf the contributions have been made and the Contribution Type using an annual checklist we send to all SMSF clients each year in July. You do not need to send us confirmation at the time each Contribution is made. This information is only required annually and we will guide you through the process and prompt you when information is required from you. Learn more about Annual Compliance process.


Step6
 

Invest your Super

The Trustees of a SMSF (ie you) control the SMSF and make all the Investment decisions for the SMSF.  ESUPERFUND clients are permitted to invest in any Investment for their SMSF that is allowed by law as detailed below. There are no restrictions. Further details can be found here:

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    Cash
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    Online Savings Accounts
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    Term Deposits
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    Australian Shares
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    International Shares
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    ETFs
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    Residential Property (with Borrowing)
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    Residential Property (No Borrowing)
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    Commercial Property (with Borrowing)
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    Commercial Property (No Borrowing)
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    Overseas Property
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    Managed Funds (Unlisted)
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    Managed Funds (Listed via mFunds)
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    Metals
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    Bonds
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    CFDs
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    Options
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    Warrants
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    Forex
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    IPOs
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    Private Companies and Trusts
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    Loans
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    WRAP Accounts
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    Collectables (e.g. Artwork)
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    Other Assets allowed by Super Law

Step7
 

Consider Commencing a Pension in your SMSF

When you reach preservation age you have the option of commencing a Pension Income Stream from your SMSF. A Pension simply means that periodically (eg each month or other period you nominate) cash is transferred from your SMSF Bank Account to your personal Bank Account to fund your living expenses. The Benefit in commencing a Pension in your SMSF is that after commencing a Pension you will never pay tax on the SMSF income (eg interest and dividends) and realised capital gains made by your SMSF again. Learn more about Pensions.


Step8
 

Data electronically accessed by ESUPERFUND

ESUPERFUND is able to electronically access the transactions and trades made by your SMSF in order to attend to the SMSF annual compliance requirements. That is at the end of each financial year, your Bank and Broker will send to ESUPERFUND an annual data file of all your SMSF transactions and trades. This enables our office to attend to your SMSF's annual compliance obligations. Minimal records are required from you each year as we already have access to your SMSF transaction data. It is important to understand that only electronic data files are provided to ESUPERFUND. We have absolutely no access to your Bank or Broker Accounts and cannot actually login to these accounts to access the required data. Only in limited instances will you be required to provide additional information to ESUPERFUND to attend to the SMSF annual compliance requirements. This includes rollover documentation and contribution details. To guide you on the information required, ESUPERFUND will send you an annual checklist each year to ascertain the investments your SMSF has invested in and what additional information we require. Where applicable we will request certain information to be provided to finalise your SMSF annual compliance requirements. The Annual Compliance Checklist is typically sent in July each year and must be returned by October each year.


Step9
 

ESUPERFUND attends to the Annual Compliance Obligations

Your SMSF must attend to certain annual reporting requirements each and every year. These include:

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    Preparation of an annual Balance Sheet
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    Preparation of an annual Profit & Loss Statement
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    Preparation of annual Member Statements
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    Preparation of annual Trustee Resolutions & Minutes
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    Preparation of an annual Income Tax Return
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    Preparation of an annual Audit
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    Lodgement of the annual Income Tax Return

The above annual compliance requirements are the compliance requirements that a SMSF must attend to annually. Importantly ESUPERFUND attends to the above annual compliance requirements for your SMSF. You do not need to arrange for another accountant to prepare the above annual documentation as it is completed by ESUPERFUND. Learn more about Annual Compliance process.


Step10
 

ESUPERFUND Annual Fee

Our annual fee is FREE for the first year (for New SMSF Setups only) and then per annum. ESUPERFUND attends to the taxation and accounting obligations for your SMSF for the annual fee of per annum (GST inclusive), irrespective of the number of transactions made by your SMSF, the size of your SMSF or the number of Members. You can be assured our low fee of per annum will cover your SMSF annual obligations. Please note that the ATO charges an annual levy of for each SMSF. This annual ATO Levy applies to all SMSFs and not just SMSF's administered by ESUPERFUND. Accordingly the annual ATO Levy cannot be avoided irrespective of which provider you choose to administer your SMSF. The annual ATO Levy of is payable in addition to our annual fee of per annum.

By using the Transaction Bank Account and specified Broker Accounts as the preferred Bank and Broker Account for our clients, we are able to ensure that our services are provided at a fee significantly below the market. This is because we are able to electronically access the transactions made by your SMSF in order to attend to the SMSF Annual Compliance Requirements. According to the ASIC Report on Cost of Operating SMSFs, the average administration fee to run your own Self Manage Superannuation Fund (SMSF) is between $2,000 and $7,000 per annum. In most cases our competitors quote only their base fees that increase the more transactions or investments your SMSF has. At ESUPERFUND our price is fixed at per annum, irrespective of the number of transactions made by your SMSF, the size of your SMSF or the number of Members. ESUPERFUND is a volume based business that has invested significant capital to streamline its systems and processes resulting in material efficiency savings which are passed on to clients. To further understand how we can keep our fees so low relative to other providers visit our Articles "Tonic for the Sceptics" and "If it's too good to be true.." now. Find out more about Fees.

Completely Safe

Importantly when you setup a SMSF with ESUPERFUND your Super Benefit is completely safe. All SMSF Investments including the Bank and Broker Accounts are established in the name of your SMSF. This is a very important point and gives you total peace of mind that your SMSF is the direct owner of the SMSF Investments. ESUPERFUND do not have any access to your Bank or Broker Accounts either directly or indirectly. So in the very unlikely event we cease to operate or trade or become insolvent, all your SMSF Investments are totally protected and secure because your SMSF is the direct owner of the assets. It is important to understand that only you as the Trustee for the SMSF can access your SMSF accounts.