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Choosing A Superannuation Fund

Choosing a superannuation fund can be tricky so it is often necessary to research on which will be the best investment. Sometimes, the help of a financial adviser is necessary. However, choosing a superannuation fund is not compulsory. People go into choosing a superannuation fund for the following purposes:

  • They are not satisfied with the superannuation fund they are currently involved with.
  • They prefer the terms, benefits and services of another superannuation fund.
  • They want other investment options.

Whatever reason people may have in choosing a superannuation fund, it is advisable to know the basics first.

Choosing A Superannuation Fund: What happens?

Before choosing a superannuation fund, an employee is provided by the employer a special form called the Standard choice form. The form suggests choices of superannuation funds, the first being that which was chosen by the employer. The second option is the superannuation fund which the employee prefers that the employer contributes to.

When choosing a superannuation fund, the employee also has an option to determine the manner by which his contributions will be invested. However, it is helpful if he provides his tax file number before choosing a superannuation fund.

If it happens that an employer does not provide a Standard choice form after the prescribed time and after the employee has given a reminder, the employee must report the incident to the Australian Taxation Office.

Choosing A Superannuation Fund: What types are available?

The different superannuation funds are:

  1. Do-it-yourself/Self Managed Superannuation fund
  2. Employer stand-alone fund
  3. Industry fund
  4. Public sector employee fund
  5. Wholesale master trusts
  6. Wrap account/Wrap platform/Retail master trusts

Choosing A Superannuation Fund: Consolidating Funds

Sometimes, an employee may end up choosing a superannuation fund when he already has an existing fund. When this occurs, the employee may decide to consolidate the funds so that he can have a more convenient way of monitoring the progress of his investments. Consolidating funds also facilitates an orderly payment schedule.

Choosing A Superannuation Fund: Who are qualified?

People who are qualified to be choosing a superannuation fund are fresh graduates who have just begun working, those who have been working for years and those who are self-employed. People who are qualified in choosing a superannuation fund must have their fund payment contributed through a notional agreement preserving state award.

Choosing A Superannuation Fund: Who are not qualified?

Not all employees may qualify for choosing a superannuation fund. The reason why they may not be qualified for choosing a superannuation fund is that their superannuation payments are affected by some work terms and conditions or that their superannuation payment is affected by a state award. Another reason why people may not be qualified for choosing a superannuation fund is that they may already be enjoying the returns of a superannuation fund or are contributing to a defined benefit fund. In this case, they inquire about it through their employers, human resource managers or with the help of government authorities.