How it works

As members of a SMSF are also the trustees, they will have an active role in the management of the SMSF. They operate the SMSF’s bank account, make investment decisions and invest accordingly.

SMSFs can accept contributions and rollover from all sources. Some of the most common contributions are:

• superannuation guarantee contributions (employer compulsory contributions)
• from your employer where you have salary sacrificed
• personal contributions (voluntary contributions) - concessional and non-concessional
• from the Government (e.g. Low income super tax offset contribution)
• transfer or rollover from other super fund.

The diagram below outlines how a SMSF works.

The members, also acting as trustees, operate the SMSF's bank account. Contributions, rollovers and investment incomes are deposited into the SMSF's bank account. The funds in the bank account are used to make investments in accordance with the investment strategy formulated by the trustees. The trustees decide on the timing of acquisition and disposal of assets.

Tax deductible life insurance policies can also be purchased to protect members. The SMSF can obtain the following tax deductible cover for members:

• life and TPD insurance
• income protection insurance.