Good to Great: How to Scale With an Outsourced CFO

When you’re trying to attract the best talent for your organisation, you offer competitive salaries, an attractive work environment, and tempting benefits. One of the best benefits you can offer your employees is a well-run, employer-sponsored corporate super fund to help them save for retirement. 

Today we’re going to talk about “Employer Sponsored” corporate super funds and what makes them different from other types of super funds. When your new employees begin working for you, they’ll need to be enrolled in a super fund. They can choose whether to use your employer-sponsored corporate super fund or to send their contributions to a different type of fund. A well-managed corporate super fund can be an effective tool for attracting and retaining talent.

 

Employer-Sponsored Corporate Super Funds

Corporate super funds are organised and maintained for employees of businesses, and they operate under boards of trustees.

Employer-sponsored corporate funds normally return all profits to members, and they’re generally low-cost funds, especially if the business is large. Fees tend to be low since employers usually negotiate good terms based on a high volume of contributors. Members of employer-sponsored corporate funds also have access to additional benefits like life insurance and loss-of-income insurance.

As you can see, there is great potential for offering benefits through employer-sponsored corporate super funds. Let’s take a look at a few other types of funds to look at the similarities and differences.

 

Industry Super Funds

Large industry super funds are available for anyone to join, although some industry funds are restricted to people employed in certain industries. They usually offer a limited number of investment options, but many people find that these investment options fit their needs.  Industry funds are usually low- to mid-cost funds, and they’re run as not-for-profit funds, so the profits are returned into the fund.

 

Retail Super Funds

Anyone can join a retail super fund: you don’t have to be employed with a particular business or belong to a certain industry. There are a number of different super funds that cover a huge variety of investment options. Retail super funds are for-profit funds, so the company that owns the fund keeps some of the profits to fund their operations. Because of this, accounts may grow slower than accounts in employer-sponsored corporate funds.

 

Public Sector Super Funds

Employees of Federal or State government departments are eligible for public sector funds. These funds have a limited number of investment choices to choose from, but they have very low fees. Profits are put back into the fund, much like employer-sponsored corporate super funds. In some cases, employers contribute more than the minimum required amount for their employees.

 

Self-managed Super Funds

Some people like to have hands-on control of their investments, and Self-Managed Super Funds (SMSFs) work well for these people. As always, however, increased control comes with increased workload and responsibility, so investors should always be aware of what they’re getting into. SMSFs are private super funds managed by individual investors. They can have between one and four members, and each member is a trustee. SMSFs can work well for do-it-yourself investors. 

Each of these funds has unique characteristics, but given the options, many people choose corporate super funds because of the added benefits, low fees, and convenience. If you’re setting up your own employer-sponsored corporate super fund and you need an adviser, give us a call. We can help you to choose the best investment choices and asset classes for your super fund, and we can monitor performance for your employees. Contact us at Altus Financial for more information about corporate super funds and how they can benefit your employees.