Superannuation

Growing up is optional, but growing is old is compulsory. Whether we like it or not, everyone has to prepare for ‘retirement’ in one way or another. Fortunately, Australians have the Superannuation program set for everyone. This mandatory scheme has been applied by Australians for several decades now, and it has proven to be one of the most sensible investments any Australian can make.

Superannuation is an asset, a pension, is a form of savings made by both you and your employer during your active working life. The rates to be of monthly superannuation deduction depend on the employee’s amount of salary (usually it is 9% of the employee’s earnings).

Who regulates superannuation funds?
There are 3 government agencies that control and implements legal standards to look after you and your benefits under the superannuation program. Although, they can not assure the interest rates or earnings of your invested funds

• The Australian Tax Office
• The Australian Prudential Regulation Authority
• The Australian Securities and Investments Commission

Types of Superannuation Funds
Retirement Savings Accounts (RSAs)

Some people believe that private financial institutions are safer venues to put in superannuation or retirement savings. However, the major risk is the possible fluctuation of interest rates. Therefore, there may be case where the retirement income is not as big as the expected amount.

Industry Funds
These funds are available for people in a specific commercial industry. This type of superannuation usually includes life and disability insurance.

Self-managed Superannuation Funds (SMSF)
This type of superannuation is also known as DIY (do-it-yourself) funds, and likewise as APRA (Australian Prudential Regulation Authority) superannuation funds. This arrangement is more suitable for people who want to be in charge of their retirement investments. Although this is a so called self-managed plan, it is still best to seek the thoughts of a professional financial advisor before even engaging in it, as this is still a complex matter.

Public Offer Superannuation Funds
These are superannuation investments offered to whichever member of the public who is qualified to throw in funds to superannuation.

Employer-sponsored Funds
These are superannuation funds that are put up and managed by the employer himself or any appointed fund manager of the company.