In the 1998 Federal Budget, the Government announced a new category of superannuation – DIY superannuation, or otherwise known as a self-managed super fund (SMFS). Like all superannuation funds, DIY superannuation is there to provide for you in retirement. As at July 2007, there were around 300,000 self managed super funds in Australia representing approximately 560,000 Australians. The major benefits of DIY superannuation are that it gives a person(s) greater control over their investments, as well as enabling them to manage their tax more effectively.
Like other superannuation funds, DIY superannuation is governed by rules and regulations relating to acceptance of contributions and preservation. These rules are designed to ensure your savings are maintained and continue to grow until your retirement, but also allow you some control over the investment decisions. It is the job of the Australian Tax Office to monitor and enforce these rules and regulations. Below are some key points to setting up a self-managed super fund.