Understanding the basics

Superannuation, or ‘super’ as most of us know it, is a way of saving and investing for the long-term, providing you with an income when you retire. Super may also provide you with benefits on permanent disablement and benefits to your beneficiaries in the event of your death. For many Australians, super will be their main form of retirement income.

To understand how super works, it's important to keep in mind that super is a framework for holding investment assets; it's not an investment in itself. Super funds can offer a range of investment options and asset classes that may include cash, property, shares and fixed interest. Your financial adviser can help you select the right options for your time of life, risk appetite and retirement goals.

You, your employer, your spouse and sometimes the Federal Government may put money into your super fund. Typically, if you’re working, your employer will contribute at least 9.5% of your salary to your super fund. This is known as the compulsory ‘superannuation guarantee’ (often referred to as ‘SG’). This rate is set to increase gradually to reach 12% by 1 July 2025.

Limits, or ‘contributions caps’ apply to the amount you can contribute to super in a year. You can make a total of $25,000 in ‘concessional’ (pre-tax) contributions each financial year – this includes the contributions your employer makes on your behalf (superannuation guarantee). You can make a total of $100,000 in ‘non-concessional’ (after-tax) contributions in a financial year or more in certain circumstances. Your financial adviser can help you determine the appropriate contribution amount for you. For more information about contributions caps, have a look at the Australian Taxation Office’s (ATO’s) website.

A $1.6 million limit also applies to the amount that can be transferred from your super account to a pension account upon retirement. During your working life you make contributions to your super fund which are invested, and the earnings you receive are reinvested, building up the value over time. Generally, your superannuation benefits must remain in super until you satisfy what is known as a ‘condition of release’; for example reaching age 65 or permanently retiring and reaching your preservation age (which varies depending on your date of birth).For more information about how super works speak to your financial adviser and have a look at the ASIC MoneySmart website.

There are several different types of superannuation funds. The mains ones are:

Employer/corporate/staff funds - these are funds established by an employer for the benefit of their staff. A fund of this type will usually be the employer’s ‘default’ fund, meaning that if an employee does not elect a specific super fund, an account will be created for them and their super will automatically be paid into this fund. Where no choice of investment option is made, the employee’s super contributions will be paid into a “MySuper” account within the fund. MySuper is a simple, low fee, diversified option that seeks to strike a balance between potential risk and potential return.

Personal/retail funds - these are funds that are open to the public and members personally join as an individual directly or through an adviser. There are many available and most will offer a wide range of investment choices and other features. Similar to employer funds, some retail funds may offer a MySuper option which your money will be invested in if you do not choose an investment option/s.

Industry funds - these were originally set up for people working in a particular industry, e.g. builders or health care workers. Many are now available to the public. Similar to retail funds, they usually offer a range of investment choices and other features. Similar to employer funds, these funds usually offer a MySuper option which your money will be invested in if you do not choose an investment option/s.

Self-managed super funds (SMSFs) - these can have up to four members and are generally used by people with larger amounts in super who want more control and flexibility, with the ability to manage specific investments.

If you would like more information about the different types of super funds, speak to your financial adviser

Generally, your superannuation benefits must remain in super until you satisfy a ‘condition of release’; for example reaching age 65 or permanently retiring and reaching your ‘preservation age’ (which varies depending on your date of birth). See the table below to determine your preservation age

Conditions of release ensure your super savings are reserved for when you reach retirement, however in some exceptional circumstances (for example total and permanent disability or severe financial hardship) super may be released earlier.

For more information speak with your adviser, go to the APRA website or the ASIC Moneysmart website.

Since 1 July 2005, employees, with some exceptions, have been able to choose the super fund their contributions are paid to. This puts you in control of what could be your biggest source of retirement savings. While your employer may have a ‘default’ fund that you can automatically sign up to, you are usually free to elect the super fund of your choice.

For help with making decisions about super, talk to your financial adviser. Your adviser can help you identify your goals and recommend the super strategies best suited to your individual situation.

Holding some of your life insurance inside super can be a tax-effective way to get the cover you need. Life insurance helps to provide a financial safety net for you and your family when the unexpected happens.

There are three main types of insurance available through your super; life (death) insurance, total and permanent disablement (TPD), and income protection (also known as salary continuance insurance). Life insurance pays a lump sum to your loved ones upon your death, TPD pays a lump sum to you in the event that you become totally and permanently disabled and can’t work, and income protection pays a partial replacement income in the event that you are sick or injured and temporarily can’t work (usually only applicable after a certain period of incapacity, up to a maximum time frame).

Acceptance for these insurance policies is usually dependent on an application process known as ‘underwriting’, and payment of insurance proceeds is dependent on a claims process, usually involving medical review and certification. For more information about the kinds of insurance available, the terms and conditions and benefits of insurance, click here or talk to your financial adviser.

You hold your life insurance (usually death, TPD and/or income protection/salary continuance insurance cover) inside your super account, and use your super contributions to pay your premiums.

Using your pre-tax super contributions means you're effectively paying your premiums using pre-tax money, rather than after tax income.

• When an insurance policy is held inside super, the super fund is the owner of the policy. That means any benefits are paid to the fund before they're paid to you or your beneficiaries. This could potentially slow down payment, and add an additional set of criteria you need to meet before the funds are released.
• Eroding your super balance to pay your insurance premiums can reduce your long-term retirement savings. To avoid this, you might consider making additional contributions to your super to cover your insurance premiums.
• Insurance benefits for policies held outside super may be tax-free - regardless of who receives it. The same rules do not necessarily apply for benefits paid via a super fund. For example, if a beneficiary is a non-dependent adult child, the death benefit may be taxed at up to 32%.

In ever-changing financial markets and regular changes to the super rules, it's only natural to need help to make sense of it all. A qualified financial adviser can help you make the right financial decisions for you, your family and your future. A financial adviser can help you assess your current financial position and work out whether you're in good shape to meet your personal and financial goals. Knowing what your goals are puts you in a better position to make choices that are right for you. It also helps your financial adviser develop or update your plan so it is tailored to your needs. The sort of things you should think about are your goals for:

• building savings and investments,
• protecting your family and lifestyle,
• planning for changes in your life like the birth of a child,
• saving for your retirement

A financial plan based on your goals and priorities puts you in control of your financial future and helps you create a secure and comfortable retirement. If you already have a financial adviser it may be a good idea to regularly review your plan together to make sure it still meets your needs.

This information is current as at 16th February 2017. This information is of a general nature only and has been prepared without taking into account an investor’s personal needs, financial situation or objectives. You should consider the appropriateness of the information, having regard to your objectives, financial situation and needs. Taxation law is complex and this information has been prepared as a guide only and does not represent taxation advice. Please see your tax or financial adviser for independent advice.

Your statement shows if you have nominated a beneficiary to receive the proceeds of your super account, if you die. A Will does not necessarily control what happens to your super benefit upon death. Your account balance will be paid in accordance with any valid non-lapsing beneficiary nomination. If a valid non-lapsing nomination is not in place, the Trustee will pay the benefit in accordance with an order of payment set out in the fund’s trust deed, commencing with your legal personal representative if your estate is solvent. Please refer to the current Product Disclosure Statement (PDS) and product updates available from our website for more details.

You can revoke or change your nomination at any time in writing using the Nomination of Beneficiary Form, available on our website or by calling Customer Services. You should renew your nomination if you marry, enter into a de facto or like relationship with a person of either gender or become separated on a permanent basis from your spouse or partner, as your nomination will become invalid in these circumstances. In order for your Nomination of Beneficiary Form to be valid, you need to sign and date it in the presence of two witnesses who are over the age of 18 and not named as beneficiaries in the form. Those two witnesses also need to sign and date the form in your presence at the same time. If you have any concerns, we recommend you complete a new Nomination of Beneficiary Form.
 

If you’re a temporary resident of Australia (excluding New Zealand citizens) who has earned super while working and living in Australia, you can apply to have your super paid to you as a Departing Australia Superannuation Payment (DASP) after you leave. Click here to learn more.

If you’ve worked for multiple employers, you may have multiple super accounts.

Getting all your super accounts together makes sense. Not only could you save on fees and paperwork, you also reduce the chance of having lost super.

If you’ve worked for multiple employers, you may have multiple super accounts.
Getting all your super accounts together makes sense. Not only could you save on fees and paperwork, you also reduce the chance of having lost super.
There are three simple steps you need to take to bring all your other super accounts to your OnePath super account:

Step 1: Fill in a Rollover Form
Fill in a Rollover Form for Integra Super or OneAnswer Frontier Personal Super. All the details you need to fill in the form should be on your previous statements from your other super providers. If you can’t find your statements, call the other super provider and they will give you the details.

Step 2: Get certified ID
You need to provide certified proof of identity for each fund you roll over. You can use your Australian driver’s licence or your passport. If you don’t have either of these you can use other documents.
In order to process requests to roll over certified proof of identity is required. OnePath follows an industry standard process to ensure that rollovers are processed as quickly as possible.
Certified copies of the following documents may be used as proof of identity.

EITHER
One of the following documents only:

• driver’s licence issued under State or Territory law or
  passport.
• OR one document from the left column and one from the right column

All copies of the original acceptable documents need to be certified as true copies by any approved person from the list below.
The person who is authorised to certify documents must sight the original and the copy and make sure both documents are identical, then make sure all pages have been certified as true copies by writing or stamping ‘certified true copy’ followed by:

• their signature,
• printed name,
• qualification (eg Justice of the Peace, Australia Post employee, etc) and
  date.

The following people can certify copies of originals documents as true and correct copies:

• a Justice of the Peace
• a police officer
• a registrar or deputy registrar of a court
• a person enrolled on the roll of a State or Territory Supreme Court or the High Court of Australia, as a legal practitioner
• an Australian consular officer or an Australian diplomatic officer
• a judge of a court
• a magistrate
• a Chief Executive Officer of a Commonwealth court
• a permanent employee of Australia Post with two or more years of continuous service
• a finance company officer with two or more years of continuous service (with one or more finance companies)
• an officer with, or authorised representative of, a holder of an Australian Financial Services Licence (AFSL), having two or more years continuous service with one or more licensees.

Step 3: Send us your Rollover Forms
Send your completed form(s) and certified ID(s) to:
OnePath Custodians
Reply Paid 5113
Sydney NSW 2001

You don’t even need to put a stamp on the envelope. We will contact your other funds and, if we have all the relevant details, your super account(s) should be transferred within 30 working days.

Important: By consolidating your super accounts, you may incur additional fees or you may lose your insurance benefits from your existing provider(s). You should discuss any potential super strategies with your financial adviser.

Why OnePath?
Having your super with OnePath means you have access to a wide range of member services including:

• a wide selection of investment funds
• comprehensive insurance options
• competitive fees

According to the ATO, there is over $17.5 billion in lost or unclaimed super – some of which could be yours.

By searching for any lost super and bringing it all together into your OnePath super account, you could give your super balance a valuable boost and have comfort in knowing that all your hard earned super savings are working towards your retirement. Here’s how to do it.

The ATO offers a super rollover service through the myGov website. Simply create a myGov account at my.gov.au, then link the ATO to your account. If you already have a myGov account, just log in and click on the ATO section. Go to the 'Super' tab. In this section, you can see details of all your super accounts, including any you have forgotten about. From there, there is also an option to roll your super accounts into one.

Important: By consolidating your super accounts, you may incur additional fees or you may lose your insurance benefits from your existing provider(s). You should discuss any potential super strategies with your financial adviser.

Why bring all your super to OnePath?

Having your super with OnePath means you have access to :

• a wide selection of investment funds
• comprehensive insurance options
• competitive fees

It’s easy to take your OnePath super with you to a new job – allowing you to keep all your super in one place.To provide your details to your new employer, simply choose one of the following options:

Download a Fund Nomination Form for Integra Super or OneAnswer Frontier Personal Super.

You simply need to know your Member or Investor Number.

Use the details below to fill out the ATO Standard choice form and to download a letter of compliance and contribution instructions to provide to your new employer.

Why OnePath?

Keeping all you super with OnePath means you could save on fees and paperwork, and could reduce the chance of having lost super. You also have access to a wide range of member services including:

• a wide selection of investment funds
• comprehensive insurance options
• competitive fees

If you haven’t provided us with your tax file number (TFN) you may be paying more tax than you need to. While you are not legally obliged to provide us with your TFN, this may impact the amount of super you will have when you retire.

What happens if we don’t have your TFN?

• You may be paying up to an extra 32% tax on your super contributions.
• We cannot accept additional contributions you make into your super.
• You will not be able to receive the Government co-contribution in your super account with us, if eligible.

How do I check if OnePath has my TFN?

• Check your latest OnePath super statement.
• Login to My OnePath > Personal details.
• Call us on 133 665 (Integra Super and OneAnswer Frontier Personal Super).

Submit your tax file number online now or download the PDF form.

When you invest through super, you can choose the investment types(s) where you would like your money to go. This choice can make a big difference to how much money you end up with in retirement.

Know your investor profile

The types of assets your fund invests in helps determine the level of risk, and the level of potential returns. As indicated below, asset classes that have a low level of risk have lower potential returns. On the flipside, asset classes with higher potential returns come with higher risk.

Make an informed choice

1. Login to Account Access to find out what investment fund(s) you are currently invested in.
2. Learn more about the funds available in Integra Super and OneAnswer Frontier Personal Super.
3. Read the relevant Product Disclosure Statement for Integra Super and OneAnswer Frontier Personal Super and consider whether that particular product and investment option is right for you.
4. Talk to your financial adviser - they can help ensure the funds you are invested in are right for your needs, financial circumstance and objectives.

You can change your investment funds via Account Access or download the form for Integra Super or OneAnswer Frontier Personal Super.

Australians are living longer and many people are now spending more than a quarter of their lives in retirement. It’s good news, but it also highlights how critical it is to plan for your retirement. It’s never too late to start planning, but the sooner you start, the easier it is and the better the potential outcome.

Here are some important questions to consider if you are getting ready to retire.

• How soon would you like to retire?
• What do you plan to do with your time when you retire?
• How much super do you have?
• How many years of retirement do you need to plan for?
• Are you thinking of working part-time?
• Will you be making any big purchases like a house, car or holiday?
• Will you access the age pension or other Centrelink benefits?

Everyone is different and how much you need to live comfortably in retirement varies between people. Factors to consider include whether you are married or single, if you have dependants, how you plan to spend your time, your hobbies and interests - just to name a few.

The Association of Superannuation Funds of Australia (ASFA) has put together a guide which shows how much you will need for a comfortable standard of living and the types of things you may need to spend your money on.

To view the full ASFA guide (the ASFA Retirement Standard) click here. The Retirement Standard is updated quarterly to reflect the Consumer Price Index (CPI).

To help you work out if you have enough for retirement, and for tips and strategies to improve your retirement savings, speak to your financial adviser.

To work out whether you have enough to retire there are three things you need consider:

• How much income you’ll require in retirement
• How many years you could spend in retirement
• How much you expect your investments to earn over your retirement years

We are living longer and it is not unusual to live more than 20 years in retirement, so it's important to determine your long-term needs.

It’s also a good idea to speak to your financial adviser who can help you with tips and strategies to improve your retirement savings.

Generally Australians can only access their super savings when they reach their preservation age. For people born after 30 June 1964, the magic number is 60. But for those born before this date it can be earlier.

When making decisions about when to retire, don’t forget you could save a large amount of money by delaying your retirement – or at least delaying accessing your super – until 60. This is because super may be accessed tax free after this age. So even if you had plans to retire earlier it might be worthwhile to wait to draw on your super.

You’ve worked hard all your life to accumulate your super savings and now you’re ready to retire, what do you do now? Basically you have three options for super when you retire:

• Take it in the form of a retirement income stream.
• Withdraw your super as a lump sum.
• A combination of both.

Remember, the way you access your super monies may affect the amount of tax you pay and your Centrelink entitlements. Before making a decision it is important to talk to your financial adviser who can help you make the right decision based on your individual retirement needs.

Access to the age pension relies on achieving a certain age, which differs depending on your date of birth. Remember, age at which you can access the (government issued) age pension is different to that at which you can access your super.

To access the pension you must also meet Centrelink’s residency requirements and your income and assets must be below a certain amount. The amount you receive in pension is determined by the value of your assets (including super, but excluding the family home) or your income, whichever produces the lowest entitlement. You should talk to your financial adviser for help working through the eligibility criteria and ensuring you receive your maximum entitlements.

It’s important to note that, while the age pension provides an important financial safety net, for many it will not provide enough to fund a comfortable retirement. It is not a replacement for super.

• Identify your personal and financial goals
• Make a budget and work out how much you have to invest
• Work out what sort of investor you are and how much risk you're willing to take
• Start investing. The sooner you start, the sooner you'll reach your goals                                                                   
• Get good advice. A financial adviser can develop a plan tailored to your personal needs and goals.

If you're thinking of investing, the first thing you need to do is work out what your personal and financial goals are.

Identifying the things in life that are important to you – like owning a house, starting a family or having enough for the kids' education – will help you work out the lifestyle you want, and the amount of money you'll need to achieve it.

Understanding your goals will give you the basis for developing your investment or financial plan. ASIC’s MoneySmart website has some great tips for investment goal setting.

Even with a relatively small amount, you can start investing for the future. The longer your investment has to grow, the better the results. Even if you can’t afford to invest a large amount, you may be able to start a small but regular savings plan, with a view to investing.

The simple truth is that the only money you can save and invest is the money you don't spend. But many people only have a vague idea of how much they actually spend.

With a budget, you can see exactly where your money goes and how it's being used. This allows you to:

• identify surplus money that can be used for investing
• see where your money is being spent, and help you decide whether to continue spending money in the same way, or reduce your outgoings and increase your savings
• cope with surprise expenses
• manage your finances, and give you more confidence in your financial future.

Once you've identified your personal and financial goals, and worked out the amount you have available to invest, you need to understand what type of investor you are.

All investments carry some form of risk, and you need to be comfortable with the amount of risk you take.

Talking to a financial adviser is the best way you work out your risk profile. But to give you an idea, ask yourself the following questions:

• How much do I need to reach my goals?
• Do I have a good understanding of the financial markets?
• What sort of return do I want on my investments (stable, fast-growing etc.)?
• Am I willing to take a risk to achieve a higher rate of return on my investments?

Risk and return are closely correlated – higher risk generally means higher returns, while lower risk usually means lower returns. As an investor, this is known as the risk/return trade off.

Understanding risk and return is fundamental to achieving your investment goals. This is because understanding your risk tolerance will decide the type of assets you invest in.

Your financial adviser is the best person to help you work out your risk profile, and choose the investment options that best suit your needs.

Asset classes refer to different types of investments. There are four main asset classes you can invest in – cash, fixed interest, property and shares. The return you achieve, and the level of risk, is different with each asset class.

Cash

Cash is the generic term for investments such as short-term bank deposits and treasury notes. Cash is considered the least risky of the major asset classes – generally providing investors with a moderate regular income, but little chance of capital gain.

Fixed interest

Fixed interest investments, or bonds, are effectively loans provided by investors to corporations and government bodies in return for interest payments over the life of the bond. Bonds carry a low to medium risk, and predominantly reward investors with a regular income stream – generally higher than that earned by cash investments.

Property

Property is considered a growth asset, and involves investing in residential or commercial property, or via a listed property trust (LPT). LPTs invest in a range of property – including residential housing, shopping centres, office buildings, factories, and hotels. As property is a growth investment, capital gains may be expected over the long term, in addition to ongoing income from rent. Property is considered moderately volatile.

Shares

Shares are securities representing ownership of a company. When you buy a share in a company, you become a joint owner of the business. As a shareholder, you may enjoy the company's profits through dividends. You can also sell the shares, hopefully for a capital gain, sometime in the future. Shares are the most volatile of the major asset classes in the short term, but can outperform other asset classes over the longer term.

Investing in different asset classes is a good way to reduce risk. By spreading your funds across different asset classes (or ‘diversifying’), you remove the risk of putting all your eggs in one basket – i.e. the risk that you will choose the wrong asset class at the wrong time.

A managed fund combines your money with that of other investors to form a single investment pool. Specialist investment managers then invest the money on behalf of the investors in a single asset class, or a range of asset classes.

The beauty of managed funds is that they can invest in a range of asset classes – including shares, property, fixed interest and cash. Exactly what type of assets your fund invests in depends on the fund’s objectives.

Managed funds offer a range of benefits including:

• Diversification – invest across a range of asset classes
• Access to experts – who make and manage the investments on your behalf
• Convenience – paperwork and administration is handled by your fund manager
• Access to major investment classes – a managed fund can give you access to international and local investment opportunities
• Economies of scale – managed funds possess buying power when the dollars of investors are pooled together which may not be available to the individual.

By investing in a managed fund, you can benefit from a diversified portfolio beyond what most investors could achieve themselves. You can also save yourself the time, cost and effort of managing your portfolio.

Your financial adviser can also explain how managed funds work, and help you select a fund to best suit your needs and risk profile.

There are some simple rules that investors have been using to help build long-term wealth for decades.

1. Stay calm

Do not rush any investment decision.

2. Diversify your investments

It’s notoriously difficult to predict what’s going to be the best-performing asset class in any given year. Diversifying investments across asset classes allows you to benefit from each year’s best performers. It can also help you smooth out the volatility of your returns.

3. Spend time in the market

One of the most powerful features of long-term investing is the ability to benefit from compound returns. By staying invested, as opposed to regularly entering and exiting the market, your investments have more time to grow and earn returns on your returns.

4. Monitor and review your investment strategy

It’s a good idea to regularly review your financial plan to make sure it’s still right for your current financial situation and that you’re on track to achieve your goals.

5. Seek professional financial advice

A financial adviser can help ensure your strategy meets your needs, and even help you update it as your circumstances change. With a clearly defined strategy and goals, you can have the confidence you need to withstand market fluctuations.

Trying to predict the best time to enter the market can be impossible. Dollar cost averaging is one useful technique to help iron out the ‘ups and downs' of the share market.

Instead of buying $6,000 in shares at one point in time, you may choose to spread your investment across regular time periods – e.g. $500 every month for a year. By spreading your investment over time, you take away the problem of attempting to determine the ‘top' or ‘bottom' of the market.

Saving and investing are not the same thing. Saving is holding your money to use in the future, instead of spending it now. On the other hand, investing is putting the money you have saved to work.

The ultimate aim of investing is to grow wealth, but you can also generate income from your investments. So why not put your savings to work, and make the most of them by investing?

For many Australians, super will be their main source of retirement income. They'll accumulate super throughout their working life, and one day they'll use this money to fund their retirement.

But what if you're the one paying the super? As a business owner it is up to you to fulfil your super obligations to your employees (which may include yourself, if you operate the business through a company).

If you'd like to find out more about your own super, click here. Or read on to find out more about what you need to do for your employees.

Generally speaking, you have to pay super for your employees if they:

• are paid $450 (before tax) or more in a calendar month, and
• work full-time, part-time or on a casual basis.

The minimum amount of super (also known as the 'Superannuation Guarantee') you need to pay is based on 9.5% your employee's 'ordinary time earnings' – that is, earnings for hours they normally work. These amounts must be paid at least quarterly to avoid penalties.

The super payments you make for your employees are generally tax-deductible in the financial year you pay them. For full details of your super obligations, read the Australian Taxation Office's Guide for employers.

If you're self-employed, you don't have to pay super for yourself. But you may choose to do so to help build your retirement savings.

You may also be eligible to claim a tax deduction for any contributions you make to super. This can make super an attractive way to save - provided you're prepared to put this money away until retirement.

The short answer is yes. Since 1 July 2005, employees, with some exceptions, have been able to choose the super fund to which their employer must make Superannuation Guarantee contributions.

If your employees don't exercise this choice, you must make Superannuation Guarantee contributions to a 'default' super fund you have chosen. OnePath can help you set up a default fund for your employees - click here for more information.

If you contribute to a default super fund for your employees, it is generally required to provide a minimum level of life insurance, depending on your employees' age.