A Brief Guide to Super Funds for Foreign Workers

Property Investment in Australia Whether you are a naturalised citizen or a foreigner with a temporary residence visa in Australia, your employers are required to pay a super guarantee on top of your wages (if you earn above AUD450 a month). This payment would go to your superannuation.

What is Superannuation?

Superannuation is a government requirement that helps you save for your retirement, regardless of whether you plan to stay and retire in Australia or not. There are four major types of super funds: corporate, industrial, retail and DIY funds.

Self-managed super funds (SMSF), which fall under DIY funds, are slowly gaining popularity because they enable an individual to invest in property and shares. Among the 312,000 superannuation funds in Australia, the vast majority is self-managed super funds. More and more, SMSF property investment is encouraged among prospective investors.

How Does Superannuation Work?

Superannuation works by collecting contributions from one’s employers and from one’s own savings. Over time, the amount, your super money, accumulates. Once it does, it will be invested in your super fund where it has the potential to grow more.

Different Types of Superannuation Funds

Corporate super funds offer varying investment choices exclusively for their employees. The problem is you may have to change your super fund once you leave the company.

Industry super funds, on the other hand, were initially restricted to employees of a certain industry. However, they have been open to the public in recent years and have become a popular choice for people looking into low-cost investment.

The retail super fund, the most popular one, is offered by banks and institutions. It offers more flexibility compared to the other two. The DIY super funds include self-managing super funds (SMSF).

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The benefit of SMSF is it gives you full control over your retirement savings, including the choice of people and investment type. However, it is important to note that more control means more responsibility. SMSF holders have legal and accounting responsibilities they need to fulfil monthly.

As long as you fulfil your duties and pay your dues on time, you can enjoy the fruit of your investment.