Your first day working in Australia

[Bob]

When you start your first day of work in Australia, you'll get a heap of stuff that's all new thrown at you. . . . . your health and safety regulations, your tax file number, your visa, and also what Superannuation fund do you want to open up?

Australia, like all Western countries, has an ageing population.

That means the people in Australia aren't replacing themselves with 2.1 children to push our wheelchairs when we get old.

In the early 1980s, it became apparent that Australians in the future would have to save during the course of their working life for their own retirement. The government would not be able to provide much in the way of a healthy retirement income for each and every old Australian and so, the Australian worker would have to squirrel away funds to provide for his / her old age. This is done by means of a Superannuation fund.

There are two types of Super funds . . . . . . "retail" and "industry" Superannuation funds.

Retail Super funds are those set up by the big Banks and life insurance companies. The banks and life insurance companies are private companies and consequently, have shareholders.  . . . . . . . I know, because I have shares in more than one Australian bank that you see in every High Street in town.

I want my shares to return me a healthy dividend every six months, so the banks and life insurance companies syphon off their customers money in order to pay fat dividends to their shareholders.

In other words, if you open up a "retail" superannuation fund account to put your lifetime's retirement money into, it will be hit hard and not achieve anywhere near what it could by the time you are old and come your day to retire.

I've said this a few times before on this forum, over the past years, and now the retail Super funds are before a Royal Commission issued by the Australian government to look into gouging into workers' retirement money.

One case, an Australian worker opted to put his retirement funds into a "cash" account which bore low interest. The account made only $1,150 that year. The retail Super fund charged six separate fees and charges amounting to $950, leaving the worker making only $200 on his $100,000 worth of funds for the whole year!

 

The other sort of Super fund is an "industry" Superannuation fund.

These are set up by your employer federation and / or professional association or trade union.

These sort of Super funds have consistently had their workers retirement funds in mind, by not paying fees to investment people and not gouging their members' funds.

Their returns, over a 1 year period, 5 year period and 10 year period 9 times out of 10 outperform the returns that workers get on their accounts invested with retail Super funds.

The Industry Super funds have been before the Royal Commission to look into workers's Super funds and have come up clean each time.

 

Whatever your business, profession or trade in Australia, it will pay you to do your homework and check out the returns on Industry Super funds compared to the glossy magazines and slick talk of the Retail Super funds owned by the big banks and life insurance people and their shareholders.

 

http://www.industrysuperaustralia.com

 

Since 2005, every Australian worker now has the legal right to decide what Super fund he wants the employer to put your retirement super money into. No longer can the boss put your money each pay into a Super account that doesn't perform in your best interests. 

By law, you can decide which Super fund you want to open up and save for retirement into.

 

 

Edited August 10, 2018 by Bob

[KayB]

Very useful information. This whole superannuation system is quite new and mind boggling to me. This definitely helps, thanks for sharing.

[greggle]

Agree - I'm with Australian Super because their performance is good and their fees (used to be) low.  There are also funds like Rest Super that are not-for-profit that have good returns and that are definitely worth exploring.

 

There's some great Super comparison sites such as Canstar that compare fees and historical performance.