News

Insights from practitioners in Information Management

Issue 31 – Super choice

A Super Choice

On the 1st July 2005 changes to the superannuation legislation will be brought into effect. Called “Superannuation Choice”, you will have the legal right to say which fund you would like your “super” paid into.

“Super” I can hear you cry, but don’t we do that already? The answer is yes. At Information Enterprises Australia we have always given you the choice of where we pay your superannuation. However, not all super funds will take money from us and another choice has to be made, but on the whole we have always given you the option. Unfortunately not every organisation has given its employees that option, and the changes to the legislation means that now everyone will be able to exercise the same right that you do.

Of course as with all things, there are potential downsides to these changes. Concerns have already been raised by the Association of Superannuation Funds of Australia (ASFA) about the use of unlicensed financial advisors (remember if something sounds too good to be true, it usually is) miss-selling of self-managed superannuation funds – if you don’t have the time, skills or adequate savings, you may not be doing yourself or your retirement savings any good by going down this route, and moving money between accounts thinking that a new fund will perform better, charge less, give you more “services” than your old one, when in some cases that is not the case at all.

The advice offered by the ASFA is a simple one, weigh up all the options before you switch funds. A case of “caveat emptor” – let the buyer beware.

Whilst there are 5.7 million people who will be able to exercise the right to choose which fund they would like their monies paid into, there are some people who will still not be able to do so. These include most public sector employees and many employees in large organisations covered by industrial agreements. If you are unsure – then don’t hesitate to ask.

But what happens now?

If you are not in IEA’s own superannuation fund choice (ING) you will be sent a letter and a “standard choice form” which must be filled in and returned to our offices. This form will be with you before the 29th of July. If you have not received a form by this date, please telephone us and we will send one out to you. But please remember that this form will only be sent to those of you who are not in IEA’s designated superannuation fund.

You will also be asked to supply written evidence from your superannuation fund that they will accept contributions made by us on your behalf.

As with all things there will be some sort of government advertising campaign highlighting the changes. But if you want to know the ins and outs, not to mention the real answers to all the questions you may have, then it is worth going to http://www.superannuation.asn.au/choiceemp/rpm.cfm?page=choice_employer_factsheets

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A Thought to Ponder
“At least 80 percent of millionaires are self-made. That is, they started with nothing but ambition and energy, the same way most of us start.”
Brian Tracy
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