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Your industry super fund – low fees, all profits go to Members
What's the difference between CONNECT and retail funds?
Retail funds are commercial organisations like banks and other financial institutions, who offer superannuation. Industry funds like CONNECT are non-profit organisations created specifically to cater for the superannuation needs of a particular industry, their profits go back to the Members.
Be informed - get to the facts
It's important to look past all the hype and look at the real facts when comparing super funds.
One of the most important points of any super fund is its ability to generate solid investment returns that will create a generous retirement payout for you and your family.
Retail funds spend a lot of money to let you know about their returns. However, our study shows low fees are also extremely important when it comes to the payout you get from super.
The study is based on the assumption that investment returns of the average retail fund and CONNECT are, and will continue to be, the same. There are no guarantees that this will be the case. CONNECT may have higher investment returns than the average retail fund or they may achieve lower investment returns than the retail average.
Look at what the research says
If the same investment returns over a 35-year period are assumed, the impact of lower fees makes an enormous difference to your super.
The graph shows if you invest with CONNECT you stand to gain an extra $104,000 at the end of a 35-year period, compared to if you had paid the same contributions into the average balanced retail fund, assuming the same investment returns. Now that's something worth thinking about!
Considering how hard it is to earn your money, why not maximise what it can do for you in retirement?
How does CONNECT do it?
One of the main reasons CONNECT has such an advantage over retail funds is its fee structure.
RETAIL FEES vs CONNECT FEES
The main superannuation fees you will pay are administration fees, investment management fees and contribution fees.
Most retail funds combine their administration fee and investment management fee to charge an annual, percentage-based fee. So as your account grows the dollar amount you pay in fees also increases. Retail funds also charge a contribution fee that can be up to 4% of every dollar you invest.
In contrast, CONNECT's administration fee is a flat fee - so even as your account gets bigger over time, the fee stays the same. This means that as your account increases, the proportion you pay in administration fees decreases.
The investment management fees CONNECT pays are wholesale rates which are typically much lower than retail investment management fees. And as its assets grow, CONNECT can negotiate lower fees with its investment managers and pass the benefit directly to you. CONNECT's entry fee is also much lower, at around 0.8%, and represents the actual cost CONNECT incurs to buy and sell assets. The investment management fees paid by CONNECT are offset against the crediting rate each year.
There is also provision for an operating cost of 0.15% for other expenses. The percentage operating fee is deducted as part of the calculation of crediting rates. It is an estimate. If the actual expenses incurred are greater than the estimate shown above, then the crediting rate would decrease. If the actual expenses incurred are less than the estimate, then the crediting rate would increase.
Our study showed CONNECT's fees could be up to 60% lower than the average retail fund over a 35-year period.
MORE OF YOUR MONEY IS PUT TO WORK FOR YOU
It's the ability of CONNECT to put marginally larger amounts under investment earlier, coupled with the effects of compound interest, that can produce much higher returns later on. CONNECT's simple, easy to follow fee structure makes it much easier for you to understand what's happening to your money.
Look at what CONNECT delivers
- No shareholder's dividends or big advertising budgets.
- More of your money being turned into your retirement payout due to a flat fee structure.
- An awareness of the industry you work in.
- Portability - if you change jobs you can keep your super with CONNECT.
- Information delivered in a way you find easy to understand.
Look at the benefits
- A non-profit organization created specifically to cater for its Members' super needs.
- Does not pay shareholder's dividends, sales commissions to agents or spend big dollars on advertising.
- Aware of your industry's super requirements, for example portability, award requirements etc.
Superannuation for the electrical contracting and communication industries