Is the PSSap right for you?
If you are in the Public Service, your employer makes generous superannuation contributions on your behalf. So it’s important to make the most of your super to ensure your retirement assets are working hard for you. The PSSap has been the default super fund for some time, but is it meeting all of your needs?
For some people, this fund and the benefits offered are adequate. However, there are some things that you should consider when deciding if this fund is the best option for your retirement savings.
Do I really have a choice of fund?
Most members of the PSSap will still receive their 15.4% employer contribution if they choose another superannuation fund. Talk to HR about whether they will continue this generous contribution rate if you move to another fund.
What about the investment choice?
Would you prefer to have access to a broad range of cost effective and high performing investment strategies for your retirement savings? Then the 4 options currently being offered by the PSSap may not be enough for you. There are many other funds that offer a wider range of investment options including specialist funds that offer the potential for higher long term returns.
Do you have competitive insurance?
Is Total Permanent Disability (TPD) insurance important to you? Most funds and insurers have a 3 month waiting period on this type of insurance. However, the PSSap has a 6 month waiting period and the definition of TPD is more onerous than commercial policies.
Is a long term income protection benefit something you need? The income protection benefit available in the PSSap is paid for only 2 years. If you have a long term illness or injury that prevents you from working for more than 2 years, the PSSap cover will not provide for you after the 2 years are up. There are policies available through other super funds with a benefit period payable to age 65.
Fees and expenses
Administration fees are payable on all PSSap accounts. When combined with the relatively high fees for the basic investment options, the PSSap may be more expensive than other funds.
Will you stay in the Public Service?
You need to decide. If not, then PSSap may not be the right scheme for you as non public service employers cannot contribute. You will need to find an alternative fund if you leave your public service position.
Still not sure what the best option for you is? Contact Milestone Financial today and make an appointment to discuss the retirement options that are available to you.