APRA funds: an alternative to SMSFs?
Statistics from The Australian Taxation Office show that over 20 per cent of superannuation assets are within a self-managed superannuation fund (SMSF) structure, and are the fastest growing fund within the super administration environment.
However, Tower Trust manager of technical superannuation sales Peter Burgess says clients looking to take advantage of the super choice rules and move to an SMSF, may actually be better off in a small Australian Prudential Regulation Authority (APRA) fund.
Unlike a do-it-yourself SMSF, members of a small APRA fund do not act as trustees. Clients who do not have the time, resources or understanding to take responsibility for pension scheme administration may, as such, prefer to take this option.
APRA small funds have less than five members, and an APRA approved trustee who has been authorised as a small APRA fund provider. In effect, they act as a bundled superannuation service.
The legislative concessions available are very similar to those of SMSFs although, as clients do not have legal responsibilities, a trustee fee of around 20 to 50 basis points is usually payable.
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