With Zach Webber | Associate Adviser
Are you part of a corporate superannuation plan, though are not entirely sure what that means? Or perhaps you still have a corporate super account from a previous employer and are not entirely sure what your options are?
The advisers at Complete Financial Balance receive many questions each month regarding superannuation to create a better life for themselves in retirement because, unless you work in the superannuation industry, understanding the finer workings of super plans can be confusing and time-intensive. However, Complete Financial Balance Associate Adviser, Zach Webber, has put together a list of 5 frequently asked questions about Corporate Super.
This post is not meant to comment specifically on whether a particular super fund is suitable or not for your personal circumstances. It is however, aimed at providing some general information surrounding corporate superannuation plans. If you should require further information regarding your personal circumstances, contact your financial planner today.
So you might be wondering, what is corporate super exactly? A corporate fund is generally a super fund with membership only open to employees working for that company. It is arranged by an employer, for its employees.
Is my super part of a corporate super plan?
If your super account was arranged for you by your employer as part of your employee benefits, then you are most likely part of a corporate super plan. A corporate super fund is where your employer has engaged a superannuation fund and negotiated terms which can include discounted fees, automatic insurance cover, and other employee benefits.
What are the benefits of being a part of a corporate super plan?
If you work for a large company, the ongoing costs of your superannuation account can be lower, as your employer may have been able to negotiate better terms with your superannuation fund due to the amount of funds invested. Conversely, if you work for a small company, you may find that your fees are comparatively higher.
Additionally, you may have what is known as Automatic Acceptance Limits, meaning that any insurance cover up to a certain level is issued automatically and does not require any medical underwriting.
I haven’t chosen any investment options within my account, so where is my super invested?
Depending on how long you have been with your employer, you will be either fully or partially invested in a MySuper product. MySuper is a major part of the Federal Governments super reforms, and will invest your funds in a mix of growth and defensive assets based on your age. If you joined the fund after January 2014, you will be invested fully in a MySuper product. Members who joined before this date will generally also have some funds invested in the previous default investment option as chosen by your employer. Unless you choose otherwise, all funds will transition into the MySuper product by 1 July 2017.
Do I have to keep this supannuation account or am I free to choose my own account?
Most employees will have the option to choose their superannuation fund, though this is not always the case. There may be industrial agreements in place, or you may be a member of a defined benefit fund. Additionally, if you are a federal or state public sector employee, you may not have choice of super. To find out, simply ask your employer and they will be able to assist.
What if I was part of a corporate super plan, though no longer work for the same employer?
If you have since left your employer, though have retained your previous corporate super account, you may have automatically transitioned into the personal division, or retained member division. While you are able to keep this account, the benefits such as lower fees and automatic insurance cover are sometimes lost. This can mean that you are now paying higher fees for fewer benefits. If this sounds like you, we recommend that you contact a financial adviser to review your options.
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