Questions to ask before joining your company super scheme

Like any investment or saving decision you make, you need to find out as much as you can about your company super scheme before deciding whether it's the best option for you. If you ask these questions, it will help you gather enough information to make a decision.

1. When can I join?
2. Is there a minimum contribution?
3. Does my employer contribute? How much? Does it depend on how much I contribute? Can I arrange a salary sacrifice to save tax?
4. Who pays the expenses of the scheme? What are they?
5. Is there a vesting period? Is it related to company service or scheme membership?
6. Do I have to pay any fees? What are they, and how much?
7. Can I put my contributions on hold? (e.g. for maternity leave)
8. What happens to my savings if I leave the company (in one year, five years, 10 years)?
9. Are insurance offers (life, disability, medical) included?
10. Are my savings locked in only for retirement? Can I take them out without leaving the company?
11. Where is the money invested? Who makes those decisions? Can I make my own decisions? Can I change those decisions at any time? Are there any costs in changing?
12. What is the risk level? Does this level suit my needs?
13. Do I get a pension or a lump sum when I retire, and is there a choice?
14. What happens to my savings (and any employer contributions) if I die before retirement?
15. If I receive a pension but die shortly after retirement, is there a continuing pension for my partner?

If you've worked through these questions and you're unsure about joining, ask for advice from your employer, your work-mates already in the scheme, or a professional adviser.

Vesting period

Subsidised employer superannuation schemes sometimes have what's called a 'vesting period'. Vesting provisions set out the period of time you must stay with the employer before you can keep the employer's contributions. (You will always get the contributions you paid yourself). If 'full vesting' occurs at 10 years, only after that will you get all of your employer's contributions. Often, though, there will be a sliding scale. After one year, for instance, you may get 10 per cent of the employer's contributions, and after 5 years you may get half.

Locked In

Being unable to remove your money from an investment or savings scheme without paying some kind of penalty. Usually an investment is locked in for a certain period - a number of years, months or until an event, like your retirement. For example if you make a six month fixed interest investment at the bank, your money is locked in for six months.

Lump Sum

A large one-time payment of money.