Understanding your superannuation is important because it can be a key to realising your retirement dreams. ASIC’s MoneySmartRetirement Planner is a useful free calculator you can use to help you work out:
Choice of Super
Most ADF members will know that a new ADF superannuation arrangement commences on 1 July 2016. It will be based on members’ choice of superannuation and will include a new fund, ADF Super, into which members may choose to direct their employer contributions. The current Military Superannuation and Benefits Scheme (MSBS) will be closed to new members from that date.
MSBS is an example of a fund typically called a defined benefit fund, as distinct from the new ADF arrangement which is based on a defined contribution (also called an accumulation fund). ASIC’s MoneySmart tip is not to leave a defined benefit fund unless you’re sure that you will be better off. If you are a member of MSBS, consider getting professional advice before changing to the new ADF arrangement. Remember that once you leave the fund, you can’t get back in.
Self-managed Super Funds (SMSFs)
The new ADF superannuation arrangement will allow ADF members to join the superannuation fund of their choice. One of those choices will be a self-managed superannuation fund (SMSF). Some people want the control that comes with managing their own super, but with greater control comes greater responsibility and significant time and effort.
If you’re running an SMSF you will typically need:
Compare your super
Use ASIC’s MoneySmart Superannuation Calculator to compare super funds. This will help you work out how much super you’ll have when you retire and how fees can affect your final payout.Super comparison websites can also be useful to help you compare super funds, but don’t take their ratings as gospel.
Before making a decision about leaving or joining a super fund, evaluate all the options. You might even consider getting professional advice from a licensed financial adviser who specialises in superannuation, especially military superannuation. You could seek an adviser through the ADF Financial Advice Referral Program which is accessible at www.adfconsumer.gov.au.
Greg Medcraft, Chairman, Australian Securities and Investments Commission