Superannuation

Superannuation / Rollover Funds

Superannuation funds are designed to allow contributions to accumulate for a person's retirement.

There are three main types of superannuation funds:

· Employer sponsored funds established for the benefit of employees.

· Industrial funds established under an industrial agreement or award.

· Personal superannuation funds established for self employed or employees who wish make their own personal contribution.

There are rules governing the level of contributions a person can make and the benefits they can receive in their retirement. Because benefits do have restrictions there is a concessional rate of tax applied to superannuation (15% of contributions and earnings).

Rolling over refers to transferring your money from one concessionally taxed super fund to another.

There are a number of advantages to using this system. Firstly, no lump sum tax is paid on the money you are transferring. Secondly, you continue to receive the concessional 15% tax rate of your earnings from your lump sum rollover.

You can rollover into either another super fund, an approved deposit fund, or a deferred annuity.

Personal Superannuation

Personal Superannuation products are generally used by the self employed, or by employed persons who wish to top up their employer superannuation arrangements. Modern fund designs allow regular contributions and / or random lump sum contributions. These investments are placed in an environment with significant tax advantages and generally provide the flexibility for the contributor to modify and adjust their contributions as required. A wide range of investment sectors and fund types are available.

Employer Superannuation

It is generally compulsory for employers to provide superannuation for employees. Well-structured funds and appropriate product selection can minimise the administration requirements for employers, as well as maximising the employee’s retirement benefit. A wide choice of funds are available and with the government's member choice legislation still to be finalised, this is sure to be an area of the industry that will undergo much change.

Self-Managed Superannuation

The "do it yourself" superannuation market is one of the fastest growing superannuation sectors in Australia. Self-managed superannuation funds allow individuals or companies to structure their own fund (often in conjunction with other professional advisers) to maintain control of their investments.

Corporate Superannuation

Employers and corporations wishing to provide employee benefits whilst also satisfying superannuation guarantee requirements have a wide choice of funds available to them. In many cases these can include group salary continuance, trauma and life cover benefits as well as a vast selection of investment sectors. Salary packaging and salary sacrifice arrangements can also add value to employees and appropriate product choice will help minimise the administrative requirements placed on the employer.

Master Trusts

Master Trusts are generally chosen by users of superannuation who want to use more than one fund manager. A Master Trust allows this and provides a single consolidated report on the returns obtained by all the selected funds. Lump Sums and insurance benefits can usually be added. Because of the ability to select many funds switching between fund sectors and adjustment of asset allocation is usually very streamlined.