Whether you’re looking to choose a new super fund, compare your options or just better understand the fund you’re with, there are some essential things you should know.
The basics of super in Australia
In Australia, each employer pays 9.5% of an employee’s total earnings directly into superannuation and this amount is on the rise.
In 2021, the minimum contribution will be raised to 10%, and will continue to rise to hit 12% in 2025.
The super contribution amount comes from your pay or salary, which includes commissions, loading and any other allowances. Things that come on top of your salary, like dividends or performance bonuses aren’t included.
Your super fund
You’ll generally be able to nominate a fund, but there may be times when you’ll be required to use a specified fund, and your employer will need to let you know when that’s the case.
Each super fund has standards that must be met. You can see whether a fund is compliant using the Australian government’s Super Fund Lookup service.
When you’re looking to find out specific information about a fund you should look in three places. The first is the fund’s website, the next is by contacting them directly, and finally, you can review the product disclosure statement (PDS).
When you select a fund, there are five areas you should review to make sure it’s going to meet your needs:
- Fees: How much the fund will charge you in management fees
- Investment options: Where and how the money is going to be invested by your fund
- Performance: How well the fund has been investing, and what kind of return have members been receiving
- Insurance: Which insurance options are available to you through the fund. Common options include life insurance and income protection insurance
- Extras: Anything extra that this fund might offer. For example, an industry fund may include benefits that are specific to your line of work
Talk to us about your retirement savings fund, to ensure you have the right structure in place for your future. Book a free consultation with one of our SMSF specialists today! http://calendly.com/taxideas