CSS Super members in the driver's seat
Friday, 5 September 2008 1:05pm
CSS Super has expanded its contribution options this year, allowing its members to decide how much they want to save from their after-tax salary contribution instead of the previous minimum of 5 per cent.
Two months ago, CSS announced that members no longer have to contribute a minimum 5 per cent of their after-tax salary into their CSS super.
Instead, they can continue to contribute 5 per cent (as a basic contribution) or choose to contribute nothing at all (0 per cent).
If the member decides not to make any changes, their contributions remain at the current 5 per cent rate.
While giving the members the option to provide nil contributions sound counter-intuitive, the fund believes it will encourage members to seriously assess how much it is they need for retirement than if they were left with the default option.
For example, the fund has set up case studies detailing how much members in various age groups should save depending on their circumstance. Based on CSS' suggested estimate, a 51-year old full time worker "Katherine" who has a small mortgage may need to double her contribution to 10 per cent so she can use her lump-sum benefit to pay off her mortgage when she retires.
"It's a great opportunity to explore how their current contribution level may affect their final benefit and to check if they are contributing at the rate to achieve their goals," noted the fund in its website.
Michelle Baltazar
This story was found at: http://www.financialstandard.com.au/news/view/23949
Printed: Tuesday, 6 January 2009 4:59pm