A self-managed superannuation fund (SMSF) is a superannuation fund in which an individual or group of up to six people save for retirement. Often, SMSFs are set up by a couple to help build for their joint retirement. SMSFs can provide people with choice and freedom in their investments; they can also be used to coerce someone into making decisions or managing the SMSF in a particular way for the benefit of one party.
All members of an SMSF are responsible for its investment decisions and must comply with Australian superannuation and taxation laws, even if circumstances change – for example, someone loses their job. There can also be a negative impact on an SMSF if there is a relationship breakdown.
An SMSF can be manipulated by abusive partners or family members. For instance by removing someone's access or coercing them into making decisions that are beneficial only to them.
Never take financial advice from anyone other than a trusted and registered financial adviser. People can check if someone's registered using the Financial Advisers’ Register.
Superannuation-related abuse can also occur if a perpetrator steals personal information, including Tax File Numbers (TFNs) or MyGov account details. This can enable them to commit fraud by creating a self-managed super fund in someone else's name and transferring funds into an account only they can access. Once these funds are transferred, getting the money back is extremely difficult.
A significant drawback of self-managed super funds is that unlike industry and retails funds, when people lose money through theft or fraud, they cannot access any special government compensation schemes, nor can the Australian Financial Complaint Authority support them.
If a person suspects their partner, or ex-partner, has stolen or misused their personal information to set up an SMSF, or removed your access to an existing SMSF, they should contact the ATO immediately.
If the fraudulent activity results in financial hardship, a financial counsellor can assist people to get their finances back on track.