Super Choice – how can employers help their employees?
Since 1 July 2005, most employers have been required to give their employees a choice of fund for their superannuation guarantee contributions.
It is only if the employee fails to choose, or chooses a fund which cannot be used by the employer, that the employer will be able to choose the fund.
Prior to this, employees essentially didn’t have a choice and they were basically stuck with the fund their employer chose for them.
In the past decade since “Super Choice” was introduced, there has been a great deal of competition in the superannuation market given that employees can choose where to put their money.
A competitive market is good for consumers with an almost limitless choice of highly developed options for employees to choose from.
So, what does this mean for employers? Well, in the early stages of this change it was essentially an administrative burden as large companies with large numbers of staff were faced with p…
For those of you currently employed on a salary, your employer pays your superannuation fund 9.5% of your earnings payable each quarter. This is known as the Superannuation Guarantee (SG) contribution.
Some employers choose to pay monthly. However, most pay quarterly and today (October 28th) is the payment due date for the July -September quarterly payment. Have you been paid your contribution?
It’s important to keep track of these payments. It’s your money and it will play a big part in your retirement.
The other thing to consider is where this money is invested. Most Australian’s have some level of exposure to the local stock market via their superannuation.
Over the last week or so, our stock market has declined by around 4%. What this means is that when your SG payment is made (hopefully by today), it will be invested within your super fund. With stock markets being down a bit, your super fund will be purchasing assets at a cheaper price.
Is this important? Tr…
Over the last 12 months I’ve published a number of posts specifically for those of you working in the resources industry.
As more and more of you connect with me on LinkedIn, it’s becoming increasingly clear, people in the resource industry need to review their Superannuation and Insurance. It’s a positive opportunity to “get your financial self and your future self - sorted.”
In the last 12 months there has been little improvement in the resource industry.
We’ve seen an improvement in the spot price of coal, in particular coking coal, however this has yet to translate into a meaningful and sustained increase in activity.
How do I know this? My client base is a high percentage of resource industry people - just like you, and I speak with them regularly. Also, as a Site Senior Executive (SSE) I keep up to date with contractors, suppliers, exploration/mining managers and other SSEs.
What I’m hearing is, there is light at the end of the tunnel, but we’re not likely to see a retur…
In November last year I published a post called Time to Risk Assess your Super and Insurance and since that time (almost 12 months) the relevance of that post certainly hasn't decreased, in fact I think it’s increased.
In the last year there has been little improvement in the resource industry. Redundancies continue, and to make things worse, industry super funds continue to provide very poor returns despite solid gains on local equity markets.
We have little control over the state of the resources industry.
However, we can control where our super is invested and how our insurance is structured.
Check your recent statement from your super fund which you should have received over the last few weeks.
If you’re not happy with the returns, don’t ignore it. Do something about it. After all, it’s your money.
My time as a Site Senior Executive (SSE) in the Queensland Resources Industry has taught me many things.
The most powerful is that of the simple ris…
Welcome to the 2016/2017 financial year.
No doubt you’re all enjoying your new cars and computers that you rushed out and bought before June 30. Or like most people, you probably didn’t realise that July 1st marks the start of the new financial year.
Don’t’ worry, this is not going to be one of those “let’s look back over the last 12 months” articles where we remember which celebrities are no longer, or who won major sporting events (although go the Maroons!). But I think it important to give some brief consideration to how our local investment markets have performed and how this has translated to our super funds.
Believe it or not, it’s been a fairly stagnant year as I write this.
Our local markets are set to finish pretty much where they started 12 months ago. A little hard to believe given the recent Brexit debacle where we were all told it was the end of the world financially.
So what should we expect from the next 12 months?
Well, nobody knows. However, there is…
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I’ve posted recently about the positive start investment markets have made for the year. This in turn has had a positive impact on my client’s super funds with balances enjoying healthy gains.
As I’ve said before, we shouldn’t get too excited about short term gains. Superannuation is very much a long term investment.
However, what the last few months does demonstrate is the need to have your superannuation invested appropriate to your time horizon and risk profile.
Understanding the numbers is important. For instance, if you are just starting out in your career and have a relatively modest super balance of $20,000, even a solid annual return of 10% will only yield in increase of $2,000 in your balance.
By contrast, if you have a higher balance of say $100,000 then the same percentage return yields a $10,000 increase. Obviously this isn’t a complicated concept. However it highlights the need to manage your super correctly from the very start.
Get your super performing e…
Quite often the Mum’s out there take time off from their professional careers to help raise the family. Of course, this is also the case for many Dad’s out there. As this weekend is Mother’s Day, the focus should be on Mum.
Being properly insured whilst working is one thing, but what about when you’re taking time off to be at home?
Many insurance companies recognise the importance of “stay at home Mums” (or Dads) and essentially treat the role as a recognised occupation. And so they should. It’s one of the hardest occupations we can undertake.
Being insured while you’re at home is important. Why? What if you become disable, or worse? What happens financially for you and your family then? These are things that should be considered in an insurance review.
A consequence of having time off may be that returning to work may mean starting a new job with a new employer. In fact this can happen to anyone over the course of their career.
One of the outcomes is a number o…
has recently been reporting on an insurance scandal involving
particulars of the case are complex and were aired recently on Four Corners if
you’d like to look up the specifics.
Importantly, the case highlights the value of quality advice in relation
to your insurance needs. The case in question involved what is known as a
Group Insurance policy. Effectively,
it is the default cover that is provided to a member of an industry
superannuation fund. For example,
many of my clients come to me with various superannuation funds Sunsuper,
Australian Super etc which include some level of insurance
cover. More often the not, the
advice I provide involves obtaining a new, fully underwritten retail policy to
replace or compliment the default group cover already in place. The reason
being, there is a massive difference between advised insurance products and
direct insurance products offered on a group basis through industry
funds. For those of you who have
On January 13 this year I wrote a post The markets are down! What’s
going to happen to my super? What do I do? And here we are a little over 2
months later and the contrast could not be greater. Welcome to the world of investing! So what do all these numbers mean and how does it impact on my super?
Well, for the majority of people, their superannuation has some level of
exposure to Australian stock markets. To get an idea of how the market is
performing, you can simply follow one of the indices such as the All Ordinaries
Index or ASX 200. Without getting too technical, these are a basic measure of how the
majority of the companies on the Australian stock exchange perform on average
on any given day. Normally reported on the news at night you’ll hear
statements like” the All Ords went up half a percent today”. On Feb 12 this year the All Ordinaries sat at around 4800 points. It’s currently sitting at 5240 points which
means an increase of around 9%. That’s an annualised return (i.e.…
Keeping track of your superannuation can be difficult. Especially when you consider the average time Australians
are currently spending in a job is just over 3 years. So in a 50 year working life, on average you’ll have around 17
jobs. That’s a lot of super funds
to keep track of. Each one of your
funds could be charging you fees and each of them could have insurance built
into them. It may not sound important,
but it really is. You could be paying
more than you have to and you could be paying for insurance elsewhere when you
already have it. Worse still, if something happens to you and you need to claim on that
insurance, you may not know where to find it.
As part of the rollover consolidation process that I undertake with
clients, a free “super search” is conducted based on your tax file
number. Various searching services
have been around for a while, however, they usually charge a fee, take a long
time and require you to complete lengthy forms. Our process is simple, qu…
Many of you may have noticed on your recent superannuation statement that an amount has been deducted for tax. Superannuation tax can be a little confusing, many people in fact believe that they pay no tax in their super. Unfortunately this isn’t true. Each year your employer pays 9.5% of your salary into your nominated super fund in order to meet their Superannuation Guarantee obligations. For every dollar that your employer pays into your fund, 15% of it is taken as contributions tax. It’s worse if you earn over $300k per year when the tax paid jumps up to 30%. If you’re a savvy investor, you’ll have your super invested in funds that earn income throughout the year. Be it interest, rent, dividends and so forth. These earnings don’t escape tax. They are in fact also taxed at 15%. Of course these tax rates are well below most people’s personal tax rates. So having your money in super does mean you’re paying a lower rate. The trade off for this is that you can’t access your money u…
plenty of information recently in relation to superannuation and there’s no
doubt that it can be a little confusing. I thought it might be useful to
put together a quick checklist that you can run through in 5 minutes and
identify whether or not your super is on track. Do you know
where your super is? Yes ¨ No
¨ Is your
employer paying you your superannuation guarantee payments? Yes ¨ No
¨ The current
rate is 9.5% of your income payable quarterly on 28 Oct, 28 Jan, 28 Apr & 28
July. You should
have just received a payment, did you? Can you log
in on line and check your current balance? Yes ¨ No ¨ Is your
superannuation invested appropriately based on your time horizon and investor
profile? Yes ¨ No ¨ Do you receive
regular communication from an adviser to help with your investment decisions?
Yes ¨ No ¨ Have you
completed a review of your insurances within superannuation? Yes ¨ No ¨ Do you know
what fees you’re paying? Are you getting value for money? …
So by now we all know that Australian and global investment markets have fallen significantly, it’s on the news, in the
papers and I’ve been publishing recent posts about it on LinkedIn. What’s causing it? Truth is, it doesn’t really matter. Oil prices are down, there’s talk of China
slowing, commodity prices are down and so forth. Historically there is always something
occurring on the world stage that can cause negativity in markets.
Investors start to worry, they sell their investments at low prices, lock in
losses only to have someone come along, buy them up and enjoy the gains as
Warren Buffet, the world’s most famous stock market
investor famously said, “The stock market is a device for transferring money from
the impatient to the patient”. And we can see this today. As I write
this, global stock markets suffered a large decline over night, with the
expectation being that the Australian market would follow this morning. Interestingly,
the Australian market is…
secret that investment markets are being punished at the moment and we’re all
seeing the balance of our super funds dropping. Not a nice feeling?
Welcome to the world of investor psychology. Investor behaviour is for the most part counter
intuitive, when markets are up we’re all happy and many of us want to invest
more. When markets are down, it’s doom
and gloom and some even sell out. But if you think about it, that doesn’t
really make sense. In reality, the risk of markets falling is greater
when they’re at their highs and the likelihood of them going up is greater when
they’re at their lows. For most of
our super funds, the longer the market stays down the better. Most of us
can’t access our super for a very long time so a depressed market is actually
good. There should be regular contributions going in to your super fund
from your employer and at the moment these contributions are buying into very
cheap assets. BHP, the
world’s largest mining company, has a share pric…
2016! We’re only 2 weeks in and already
the media have been reporting large falls on Australian and Global stock
markets.And they’re right, the
Australian stock market (as I write this) is currently sitting at almost the
exact levels of 10 years ago. So what
does that mean for your super fund and how can you take advantage of this
situation? Most people have exposure to the stock market through their
super funds, particularly if you’re invested in a balanced or growth option
within a retail super fund (Sunsuper, Australian Super, AMP the list is almost
endless). The reality
is, the level of the market is only of concern if you need to access your
funds. So unless you’re approaching retirement, it’s not really an issue. Markets will recover, they always do, it’s
just a matter of time. There is however a massive opportunity with market
levels so low. There have only been a handful of times over the past
century where markets have been at or below the levels they were 10 …
reality of working in Australia’s mining industry is that it can be highly
volatile. One minute you’re enjoying the benefits of working in your dream job,
the next minute you’re left scratching your head as to why you’re no longer
Christmas/New Year break I read plenty of news stories about Australia’s major
mining houses (BHP/BMA, Anglo, Santos, Rio etc.) continuing their cost cutting
measures by shedding staff and contractors. I’ve spoken with many people
who have been impacted by this personally and whilst the majority saw it
coming, it’s still a difficult situation to deal with. So what
should be done? Apart from the obvious
job hunting, there may be some other things you can do in relation to your
superannuation and insurance. With any change in circumstance whether it
be employment, starting a family, buying a house and so forth, you should
review your superannuation and insurance needs. For
example, if you’ve just left the mining industry, or hav…