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What’s the difference between industry super schemes and others?
May 11, 2015
One of the most commonly asked questions about superannuation is about which type of fund to use. There is an excess of information out there and every company promotes that they are the best and better than x, y ,z. It can be a headache to know where to start.
There is a lot of debate as to which category of fund is better than the other so it is important to understand the key differences, their advantages and disadvantages.
Types of funds
1. Industry funds These are multi-employer funds operated by parties to industrial awards, usually employer associations and unions. They primarily offer services to members of a specific industry, such as retail workers, hospitality workers and builders.
2. Retail fundsRun by financial institutions, these are open for investment to the general public. They are offered to the public by fund companies and banks and operate as an investment platform.
3. Corporate funds
Generally, these are only open to people working for a particular corporation. In some organisations membership is made available to ex-employees or relatives of existing employees. By law, employers must offer a default super fund option for their employees as an alternative to exercising Choice of Fund rights for those who do not wish to choose their own super fund. Corporate super funds can be set up through retail master trusts or in some cases, employers may choose to operate their own employer-sponsored super funds.
4. Public sector funds
Public sector funds provide superannuation for employees in the public sector. They are run and structured with the same benefits as industry funds, and include funds established for public servants and for employees of statutory authorities and local Government.
5. Small super funds
Small super funds are predominantly self-managed super funds (SMSFs) although a small percentage of small funds are known as small APRA funds.
6. Retirement Savings Account (RSA)
Retirement savings accounts are established for holding superannuation savings. They operate much like bank accounts, except restrictions apply to withdrawals like regular superannuation accounts. They are run for profit by financial institutions such as banks, building societies, credit unions or life insurance companies.
We are available to provide advice about which super fund is the best option for you. Why not schedule a meeting with us now?
Information current as at 7 May 2015
The advice is general in nature only. Before acting you should consider the appropriateness of the information having regard to your personal objectives, financial situation and needs. You should read the relevant Product Disclosure Statement (PDS) and Policy Document before making any decision about a product.