An Introduction to Superannuation
General Advice Disclaimer Lasseter has prepared this presentation for general information purposes only and does not constitute personal advice. You should not act solely on the basis of material contained in this presentation. We recommend that formal advice is sought which considers all your individual objectives and needs. No material contained within this report should be construed or relied upon as providing recommendations in relation to any financial product.
Types of Superannuation In Australia we have 5 basic types of superannuation funds: Corporate and Public Sector (Eg Public Service Super) Industry (Eg Cbus Super) Retail; (Eg AMP Superannuation) and Small APRA Funds (Similar to a SMSF but has a register superannuation Trustee) Self Managed Superannuation Fund (SMSF) In this presentation we will focus on three of these types Industry, Retail and SMSF.
Selecting the Right Fund Industry Retail SMSF Control Trustee discretionally Choice of Asset Classes You own the assets. You makes all decisions make the decisions Investment Choice Adequate (usually 3 to 10 High (large range of Unlimited (all investments investment options) investment options) allowed under legislation) Flexibility (eg pensions, Basic service levels Good but not tailored to Completely tailored to asset transfer, adaptability) individuals your needs Cost (MER) 0.4 to 1.5% (average approx 0.5%) 1.5 to 4.0% (average approx 2.2%) 0.25% to 1.5% (the bigger the fund the smaller the MER)
Retail Funds Likely Best for Those: Who don t want to be too involved in their super but need substantive life and income protection insurance. Advantages: Wide choice of investments some even allow direct share trading Typically good website and reporting Better ones have high quality insurance and estate planning options Many offer spouse splitting and other important functions
Retail Funds Disadvantages: Extremely expensive. Most expensive form of superannuation. Third party trustee can make decision to protect themselves not help members. Need to make decisions well in advance, and paperwork can be cumbersome for pensions, spouse splitting and withdrawals. Extremely inefficient during the transition to retirement years (55-75) Can be inefficient for small balances
Industry Funds Likely to Best for Those: Who don t want much involvement in their super Are only in the accumulation stage Advantages: Generally low cost. For balances between $10,000 and $200,000 highly likely to be the cheapest option. Enough investment options for simple accumulation. Can be very good for accumulating balances with minimal attention to your super.
Industry Funds Disadvantages: Generally poor administratively (websites, phone centres, speed of processing) Typically have very poor options with pensions, spouse splitting, withdrawals. Need to make decisions well in advance and need to follow up constantly. Insurance options often overpriced and/or unsuitable Estate planning options usually very poor Default funds are relatively aggressive and probably only suit those below 50 Be very careful of funds with a high weighting to unlisted assets (property, infrastructure and private equity) CBUS, MTAA, Westscheme, AGEST, Australian Super, Host Plus, Hesta
What is a SMSF? A self managed superannuation fund (SMSF) is a fund that meets the definition of a SMSF in Section 17A of the Superannuation Industry (Supervision) Act. This generally means that a fund is a SMSF if: it has four members or less no member of the fund is an employee of another member of the fund, unless they are related each member is a trustee trustees receive no remuneration for their services as trustees.
SMSF Likely to best for those: Who have over $200,000 in Super assets (This amount will vary from person to person) Are prepared to be involved in their super fund Are in or approaching their retirement age Advantages: Full control of every part of your super Full Investment choice including government guaranteed cash and direct property Pension, Withdrawal and Contribution superiority Lower fees than all retail super funds and competitive with industry funds above $200,000. Cheapest option for large balances * subject to service provider fees Up to 4 members pooling assets and managing cash flows for the best results for all parties
SMSF Disadvantages: May require your regular involvement in the fund if you do not use a full service provider like Lasseter Not practical for balances of less than $200,000 Not practical for those living overseas for the long term
SMSF Costs Establishment Costs FREE (Lasseter will establish your SMSF at no cost) Corporate Trustee - $444 (One Off ASIC Fee) see our SMSF Starter Package Annual Accounting and Tax starting from $1320, see our Compliance and Administration Package Annual Audit starting from $330 * Annual ATO Levy - $150 Annual ASIC Fees - $212 (only for corporate trustee) Other Professional Fees ie Financial Advisor Investment Fees depending on investments chosen
What Next? If you have any queries please call us on 1300 083691 or We can contact you request via our website press here View our SMSF Starter Package View our Compliance and Administration Package
Lasseter InFocus Offices: T: 1300 083 691 Melbourne Altona E: info@lasseter.com.au Geelong W: www.lasseter.com.au