As we usher in 2023, it is important to check your super to be sure it’s customised to fit your age, your risk profile and your insurance needs. Here are three important areas for you to consider.
Are you invested in NGS Super’s default option (Diversified (MySuper))? This option is designed to suit most Fund members and is based on an investment model of approximately 70 per cent growth assets and 30 per cent defensive assets. It is constructed around the concept of diversification and has performed well over five (5.21 per cent pa) and 10 year (7.36 per cent pa) periods to 31 December 2022.
Are you just starting out in your career or are you approaching retirement? Your age may be a consideration in terms of your risk profile. If retirement is 30 years away, you may be able to accept more risk than a person who has only a few years before retirement. NGS Super offers a wide range of investment options which can be customised to suit individual preferences as well as a team of qualified financial planners who can assist you to design an investment portfolio that suits your age and risk profile.
Another important consideration is salary sacrifice, which offers a tax incentive to encourage people to build their retirement balance. Currently, workers receive a 10.5 per cent compulsory contribution from the employer and this figure will move up to 12 per cent on 1 July 2025. With salary sacrifice, members can contribute up to $27,500 per year including the employer contribution. Salary sacrifice contributions are taxed at only 15 per cent (up to the limit) rather than at marginal tax rates. This can result in significant savings in tax which over time will increase the retirement nest egg.
Are you under-insured, over-insured or not insured at all? Your Member Statement will show you your levels of cover and the premiums deducted for your insurance. NGS Super has carefully designed its insurance products over the years and has won significant industry awards for insurance. The reasons for this success are simple: the design of the insurance policy, the benefits members receive and the competitive cost of cover.
NGS Super offers death cover, total and permanent disability and income protection insurance as a default for members who meet the eligibility criteria.
Insurance offered through superannuation funds can be cheaper than retail insurance products because of the scale of membership. It is a genuine member benefit which thousands of members and their families have taken advantage of over the years. Members can dial-up (increase) their cover subject to approval by the insurer, or dial-down their levels of cover, or cancel their insurance completely. So have a think about your insurance needs and look at your present cover to see if they are congruent.
Who gets your super in the case of your death? This has been in the media lately and certainly many members do not understand how it works. Superannuation is held in a trust and does not automatically become an asset of a deceased member’s estate. In the case of a non-binding death nomination, or no nomination at all, the Trustee is legally obliged to investigate the late member’s personal circumstances (married, de facto, children) to locate a valid dependant and distribute the death benefit accordingly. A dependant must fit into one of the following categories: spouse (married or de facto); child (of any age); or an individual who was in a financially interdependent relationship with the deceased. In the case of a valid binding death nomination, the Trustee has no discretion as to where to pay the benefit.
It must be paid to the named beneficiary or it can be paid to the estate if this is what the deceased had stipulated in the binding nomination. In this case the benefit is paid to the executor of the will and is distributed in terms stipulated in the will. A valid binding death nomination provides the assurance of to whom the benefit will be paid. You can call the NGS Super Help Line to assist you with your beneficiary nomination if you have any questions.
These matters are important, and it is good to know that you have them set up correctly.