Sunday, May 20, 2012

What is Superannuation?

This is how Super is described by AMP

What is Super?

The thing with Superannuation in Australia is that nearly everyone that has worked has it.

Superannuation is a long term savings account whereby Australians can save for the long term - save for their retirement. For many Australians it will be the largest asset that they have when they come to retire. Outside of their family home.

As such making choices around how it's invested, what sort of advice and assistance people are getting can make a big difference to how much people have in retirement.

Why Super is attractive?

To make superannuation savings attractive super money is normally taxed at a lower tax rate than many people's marginal tax rates. So over the long term those savings can build and build year-on-year and just like compound interest you could end up with much greater savings over a long period of time by having reduced tax in a superannuation environment.

When you join an employer you have the choice to take the default fund that employer offers or you can usually choose your own superfund. When you change job you can continue to have your super monies paid into that fund and it can stay with you for life.

Super Choices

Everybody is different and there are a number of choices that can be made with regards to super. In particular choosing where your money is invested. Is it invested in more conservative options such as cash and term deposits, or is it invested in share markets, property funds or specialist funds such as infrastructure.

There's a number of factors that make up how much you have in superannuation when you're retire. For example:
  • how much money you put in;
  • how long that money is being invested;
  • what kind of investment returns you receive, and
  • what fees came out.
An important factor is how long you've had the money invested. Similar to a bank account if you put money in early it's got more years to compound and grow. Superannuation is better if there's more money earlier than trying shovel as much money into it in the last 5 years.

What to look at in the Super Fund?

Most people compare one fund to another by looking at the couple of things. Fees and costs are always on the top of everyone's mind. Other things are performance (remembering that past performance is not reliable indicator of future performance) and what other options the account will offer, such a the range of investment choice. And does it come with insurance. And is the insurance provider is the one you can trust. There is a lot to consider. It depends on who you are as to which super fund is better for you. So speak to your adviser first.

Here is the video:

Monday, May 14, 2012

Searching for lost Super

If you've ever changed your name, address or job, you may have lost some of your super.

If you think you've lost some or all your superannuation (super), you may be listed on Australian Tax Office (ATO) lost members register or in other records that ATO maintain, including unclaimed super register and the super holding accounts (SHA) special account.

To find out if you have lost or unclaimed super, you can use ATO search tool, SuperSeeker or use websites such as which can help you to find your lost super for free and fill out all the required forms to transfer or consolidate your super accounts.

Who can have lost Super?

Your super fund will report you as a lost member to ATO if:
  • they have not been able to contact you
  • they have not received any contributions or rollover amounts for you in the last five years, or
  • your account was transferred from another fund as a lost member account and no new address has been found.
The ATO maintains a register of reported lost members but the super fund still holds your monies.

Who can have unclaimed Super?

Super funds are required to report and pay unclaimed super money to ATO twice a year. The following are the unclaimed monies that tax office may hold on your behalf:
  • unclaimed super money:
    • for a member 65 years old or older
    • a non-member spouse
    • for a deceased member.
  • unclaimed super money of former temporary residents
  • certain accounts belonging to lost members:
    • lost accounts with balances of less than $200 (small lost member accounts),
    • lost accounts which have been inactive for a period of five years and have insufficient records to ever identify the owner of the account (insoluble lost member accounts). 
Searching for a lost Superannuation is a serious matter and you should take extreme care with that.