Types of superannuation funds
Posted on July 16, 2008 - Filed Under Finance |
Although there are various types of superannuation funds as available today, these funds cab broadly be categorized into two basic types – namely, the Defined Benefit Funds and Accumulated Benefit funds. The Defined Benefit Funds are usually employer operated and the calculation of benefits is based on a formula (for example, you get a multiple of your salary amount at retirement) instead of getting a direct account balance. The Accumulated Benefit Funds, on the other hand, are earnings and contributions accumulated in your account.
However, superannuation funds can be further divided into other relevant groups that include:
Public Offer Funds: These impose no membership restriction, such as MAP.
Funds Sponsored by Employers: This superannuation fund is run directly by the employer and the fund membership is limited to employees.
Industry Funds: These funds are most often based on trade unions and offer limited membership to individual occupational groups.
RSAs or Retirement Savings Accounts: These funds are primarily operated by banks and other financial institutions and the accounts here are the guaranteed capital with modest returns.
Self-managed Funds: These funds are basically privately operated by individual or couples jointly. It is either the APRA (or the Australian Prudential Regulation Authority) or the ATO (or the Australian Taxation Office) to regulate these funds. Which organization will preside over which fund will be dictated by the fund structure.
There are evidently many options when it comes to choosing a superannuation fund for yourself. However, it is for you to choose the one that best addresses However, it is for you to choose the one that best addresses our needs.
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