Depending on the sector you work in, and how long you’ve been working, you may be eligible for a defined benefits superannuation fund. The Solution F team is experienced in providing financial advice to those with the option of entering into defined benefits super, and how to plan for retirement.
Most newer employees in the workforce are entered into accumulative superannuation funds, where employers and employees contribute a set amount which is invested in the stock market by your chosen super fund. The final amount depends on the interest earned, less management fees.
Defined benefits superannuation is less common today and generally only offered by public sector employers, as this form of superannuation carries a greater level of risk for employers. Under defined benefits super funds, the amount you’re eligible to receive on your retirement is calculated by a formula. The formula differs slightly depending on the organisation, but common factors include:
- employee salary at retirement, or average salary over a set period
- length of employment with the company.
Defined benefits superannuation can be paid as a lump sum, or a calculated percentage of your final salary as a monthly payment until death. Under this type of super scheme, your money is protected from investment market slumps, allowing you to more effectively estimate your likely retirement benefit. Some employees are first placed in a defined benefits scheme, and later given a choice to move to an accumulative fund.
The financial advisors at Solution F have extensive experience creating financial planning strategies for those included in defined benefit superannuation schemes, and can provide advice on whether to move into an accumulation fund if given the choice.
Please contact us for more information or to book a consultation. We also specialise in financial planning in Canberra for self-managed super funds, and financial advice for retirement planning.