rick07

My husband and i have just started working and need to know how to set up a superannuation fund, is there different ones to use, if so which is the best?
It just goes right over my head this one, if anyone has any info please let us know!!!! thanks

coast101

Hi
When we started are 1st jobs out here our employer gave us all the relevant forms to fill in for the super, we went a long with there choice as we didn`t know much about it.

Elle

jad n rich

Do you mean how to set up the control of your own super? so you can own shares, deposits, property all under your own super fund, if so any accountant can set it up for about $500 then you choose where to invest and there are annual running fees.

Or industry super, each large industry such as government, building, teaching will all have a fund for their members.

Or pick your own, google super funds, and get a disclosure statement which will tell you all about the fund.

Be aware most super funds invest in shares, most of the time we have been here super funds have returned a negative or minimal return, not so the last year, most have done well as the share markets done well.

You have to invest somewhere tho, the age pension in aus is asset tested and most wont get one!!

rick07

Thanks for that, they have given me forms to set up with their's so i'll just go with that, thanks again

Paul and Chloe

Hi there...

I did some research and have found a good website:

http://www.superratings.com.au/

It seems that the Industry Funds have become a very good option for the majority of investors as they have very low fees and some have excellent returns. They have been open to anyone since the beginning of 2006 when the regulations changed in the industry. I am looking at going with http://www.mtaasuper.com.au/ they have very low fees and their performance stats are as follows:

As at 31 December 2005 our Balanced Option has been rated by SuperRatings as:
No. 1 over 1 year with a crediting rate of 19.5%
No. 1 over 3 years with a crediting rate of 16%
No. 1 over 5 years with a crediting rate of 10.6%

10.6% over a five year period seems like a pretty good return to me!

Cheers

Paul

Paul and Chloe

It is definately worth doing your own research as this will be your (or one of your) pension funds and there are huge differences between both the fees charged and the returns produced by the various Super Funds. I actually work for a large wealth management company and was shocked when I compared the fees of my original Super that I had been "placed" in compared to some of the best available in the market. I was paying upfront fees of 4%, and high commission charges plus my returns were 5% lower than the cheaper funds as well. I have added the link for the fees from one of the Industry funds:

http://www.mtaasuper.com.au/join_fees.php

It is important to remember that even a samll average % difference in returns or charges can make a huge difference to the value of your Super at retirement. If you take a $50k salary over a 30 year period with the 9% Super contribution the final fund value figures work out as follows:

Net 5% return: $312096
Net 7% return: $457489
Net 10% return: $847682
Net 12% return: $1310611
Net 15% return: $2596229

For those of you who want to play with the numbers further try this site:

http://www.relocationstation.com/calc-compounding.htm

The numbers show that by despite making the same contributions your final fund value can be vastly different simply by trying to maximise your net returns (Performance minus Fees). $312k to $2.59million!

Cheers

Paul

bru

What do you mean by 'crediting rate'?

Paul and Chloe

It means the Net return after the trading % fee is deducted.

Vash the Stampede

Most employers will offer you a superannuation scheme which has already been arranged by the company - but as someone has already pointed out, it makes sense to investigate alternative funds. Superannuation will be paid by your employer at the rate of 9% of your annual salary, which you may choose to supplement with additional payments of your own.

The good news about Australia's superannuation system is that it actually works; unlike the UK, Australia is not drowning in the mire of a nationwide pension plan crisis.

While superannuation funds will fluctuate to a small degree, they are generally stable and provide fantastic returns. As with most things, the proof of the pudding is in the eating - and the proof for the success of supernannuation vs. traditional pension schemes is self-evident.

If you want to avoid any links with the stock market, try to find a super scheme which invests primarily in property rather than shares. If you're a government employee, it won't matter because your super will be protected from market fluctuation.

When I read that Royal Mail has a pension fund deficit of £5.6 billion, I realised just how lucky I was to have worked for Australia Post, where superannuation was paid at 14.5% p.a. and my personal fund rose consistently every year - regardless of any movements within the stock market.

The bottom line is that superannuation isn't as scary as it first appears, and there is plenty of free advice out there for people who are new to the game.

Vicky88

What you really need to check out is their charges in addition to their performance. As someone else pointed out, lots of funds take the 4% up front then have a yearly management fee.

I only have a small amount of super and have it with Rest (www.rest.com.au). Good thing about REST is if you have insignificant amounts in your account, they charge very low fees. They also have a Platinum rating.

Unless you think you will be accummulating megabucks in your super account, look for something with the lower entry/management costs.

moneypenny20

And if you get a new one set up before the end of the month with at least $1000 in it, the government will put in another $900 - $1000 for you. Can't be bad.

bru

Is self managed supper funds (registered as trusts) are common in Australia? What costs involved in setting up and running such a fund. Let’s assume that you are a high flying investment guy capable of generating more returns while assuring a balanced risk for your own super fund and you and your wife are the trustees.

Vicky88

Think that because of required returns, fees etc. they say that unless you have $100K+ in your super, you are better off getting a fund. Self Managed funds have taken off quite a bit the past few years, but they are very closely regulated to ensure you don't dip into them. i.e you can buy property thru your super fund, but you can't live in it rent free.

Vash the Stampede

REST is a great choice; I was with them before I began working for Aussie Post, and might actually go back to them when I return home.

bru

Spot on. That's exactly why I asked this question. Buy a property from the fund to live. Charging a rent is again a saving. But I have no idea what the tax issues behind this are and how viable this option. Also not sure about the running cost of such a self managed fund. Just a thought..