Money
Issue No. 23 - June/Nuly 2005
Prepare for superannuation choice
by Tony Catt
Superannuation fund members should be preparing their strategies for the introduction of super fund choice on 1st July. Fund choice presents an unprecedented opportunity for Australians to take control of their retirement savings. Further, the arrival of choice will encourage many fund members to review the adequacy of their superannuation balances.
The potential impact of fund choice, particularly on the superannuation of higher-income earners, should not be underestimated. The Association of Superannuation Funds of Australia (ASFA) calculates in a recent research paper that more than five million fund members will have the right to choose their fund under the choice legislation and about 456,000 of them will exercise that right.
ASFA projects that fund choice will change the face of superannuation with close to $50 billion being switched between funds over time. As expected, the research suggests that fund members with higher account balances will be the ones most inclined to change funds; many to establish self-managed funds.
We urge you to contact your Adviser now for guidance on how you should respond to fund choice. An unfortunate aspect of choice is that some fund members will inevitably make the mistake of leaving excellent funds with low fees and quality insurance options. Many fund members are getting extremely competitive packages from their existing funds without realising it. This is a time to be very informed and very cautious.
Your Adviser’s Role
Your Adviser is ready to:
- Assess whether your super savings to date and the level of your regular contributions are adequate for your retirement objectives. Your adviser’s knowledge of your personal circumstances, including your superannuation and non-superannuation investments, and income, would play a central role in this review.
- Discuss your eligibility for fund choice. (You should also ask your employer immediately about your e...
