BT Super Review
BT Super for Life is provided by BT Financial Group. BT Financial Group has been helping thousands of Australians grow and manage their wealth since 1969, and this wealth management specialist is owned by one of the ‘big four’ banks, Westpac.
BT’s Super for Life is designed to make your superannuation as easy to manage as possible. BT Super online offers a wide range of attractive and flexible features designed to help you build a super balance right from the day you start your first job. This enables you to plan for the future and ensure that you can enjoy a comfortable and financially secure retirement.
Super for Life is specially designed to evolve with you and your changing needs as you go through each stage of your life. BT Super for Life also offers a MySuper product. MySuper was recently introduced by the Australian government to help make super as simple as possible for Australians who don’t want to have to make complex or confusing decisions regarding their superannuation.
Benefits of BT Super for Life
BT Super for Life offers three account types to suit different life stages. You can choose the account that best suits your requirements out of a Savings account, a Transition to Retirement account and a Retirement account. A Savings account allows your employer, you and your spouse to make ongoing contributions to help build your superannuation balance. You can also transfer money into your Savings account from another super account, while you also qualify for Death and Total & Permanent Disability insurance cover.
- When you retire from the workforce, or even when you start approaching retirement age, you can start withdrawing funds from your BT Super for Life — Savings account, or you can transfer it to a Retirement or a Transition to Retirement account.
BT Super Online
- One of the handy features of BT Super for Life is that you can easily manage your super by logging into your internet banking. This allows you to view your banking and super balances all on the one screen, plus you can make a super contribution with the click of a button. You can also check your balance, look at your transaction history, examine your investment performance and even update your investment preferences. This makes your BT fund management as simple as possible.
- Another benefit of BT Super for Life is that it’s easy to transfer super from other accounts into your Super for Life fund. When you first open an account, BT will seek your approval to conduct a SuperSearch on your behalf with the Australian Taxation Office. This will then help you track down your lost super and combine it all together in the one place.
- When it comes to investing your money, BT partners with leading investment managers to help get the most out of your super. You can choose from two investment options. The first option lets BT decided on the right investment fix for you in a Lifestage Fund, with the mix of investments adjusted as you age. The second option allows you to specify how you want your money invested by choosing from the investment funds that BT offers. This gives you greater control over how your super is invested.
- As this is an online super product, BT mostly communicates with account holders online and via email or internet banking. At times when an important message needs to be sent, for example that your annual statement is ready to be viewed, you could be notified via email or by a secure message through your internet banking account.
- Of course, there are a range of other benefits available for BT Super for Life members. These include the ability to earn points you have earned on eligible credit cards into super, as well as deals, discounts and special offers with a selection of major retailers and brands as part of BT Benefits.
Risks of BT Personal Super
When you invest in super, or when you make any other investment for that matter, there is always a certain degree of risk attached. BT Super for Life can invest in a wide range of asset classes — cash, fixed interest, property and shares — each of which has varying levels of risk.
As your super fund offers a variety of investment funds from which you can choose, the likely return from your investment and the risk of losing money will depend on the fund you select. Generally speaking, the higher the possible returns you can receive from an investment, the greater the risk attached. The right level of risk for you will depend on things like your age, how long you will be investing for, what other investments you have and your general approach to risk.
If you’re thinking of opening a BT Super for Life account, there are a few key points worth remembering:
- The value of your investments will fluctuate
- You are not guaranteed a return on your investment and there is a chance that you will lose some of your money
- The returns you receive may vary greatly. The past performance of an investment is not an accurate prediction of future results
- The laws that affect your super account may be changed in the future
- The end balance in your super fund may not be sufficient to provide for your retirement. You’ll only receive payments from your super fund until your account balance has been used in its entirety.
How does BT Super Fund Invest Your Money
As mentioned above, there are two options you can select from when deciding how to invest the funds in your super account. The first option is to let BT take care of all the investment decisions with a BT Super for Life — Lifestage Fund. A Lifestage Fund offers an effective and diversified portfolio that is designed and managed specifically to suit your age.
There is a Lifestage Fund for each decade designed to suit different age groups/ For example, if you were born in 1984 your money will be invested in the 1980s Lifestage Fund, which has investment needs and a risk approach that is typical of investors around the same age as you. The level of risk attached to your fund is changed by automatically adjusting the mix of asset classes as you progress through life. When you’re younger, the Lifestage Fund is geared towards growth and higher returns. But this will gradually shift to a more conservative investment portfolio as you grow older.
The objective of all BT Super for Life — Lifestage Funds is to provide an investment return that is above the rate of inflation. Investments are made by combining a range of leading investment managers from Australia and the rest of the world into a single fund.
The second option available to you is to specify your own investment mix. This is done by selecting the percentage of your super balance that will be invested in the following five funds:
- Super Cash
- Conservative Fund
- Moderate Fund
- Growth Fund
- Lifestage Fund.
You choose how to spread your money when you first apply for an account, though you have the freedom to change the percentages at a later date online.
Of course, when deciding on your investment strategy, you’ll need to consider factors such as the likely return from your investments, how much risk you would like and how long you will be investing for.Back to top
Fees and Costs of BT Super
Though the fees and costs attached to super funds may seem relatively small, they can have a significant effect on your super balance over the life of your investment. This can end up leaving you with a great deal less money to fund your retirement, so you need to make yourself aware of all the fees and costs attached to your chosen BT superfund.
The fees on your BT Super account may be deducted from your account, from your investment returns, or from the assets of BT Super for Life. The following fees are attached to BT Super for Life — MySuper Lifestage Funds.
- Investment fee: 0.5% per annum (p.a.) of your account balance plus a performance fee.
- Administration fee: $5 per month, plus 0.45% p.a. of your account balance.
- Buy-sell spread: 0.22%-0.38% depending on your Lifestage Fund.
- Switching fee: Nil
- Exit fee: Nil
- Advice fee: Nil
- Other costs: You may be charged an advice fee if you agree a fee with your financial adviser, plus insurance costs will apply if you hold insurance cover through your super fund.
- Indirect cost ratio: Regulatory change expense recovery up to 0.1% p.a.
Tax Treatment of Super
Superannuation contributions, earnings and withdrawals can all be subject to tax. In terms of BT Super for Life employer contributions, some (but not all) will be taxed. If you provide your Tax File Number (TFN) this will generally be at a rate of 15%. This tax is typically deducted quarterly in arrears, though high income earners may have to pay additional tax on their contributions. It’s also important to remember that limits apply to the amount of contributions that can be taxed at standard rates, and you may be charged excess contributions tax if you exceed those caps.
If you hold a BT Super for Life—Savings account, your investment earnings and capital gains will be taxed at a maximum rate of 15%. However, certain capital gains may be charged a concessional tax rate of 10%. In a Retirement or Transition to Retirement account, however, your investment earnings will currently not be taxed.
When it comes to making a withdrawal, if you are 60 years or older you will generally not have to pay tax. If you are less than 60 years of age, you will be taxed as follows:
- Lump sum withdrawals have no tax-free component. If you are under your preservation age (this is between 55 and 60), tax is paid at 20%, plus a Medicare Levy). If you’re aged between your preservation age and 59, your withdrawal will be tax-free up to the low rate cap, and you’ll then be taxed at a rate of 15%.
- Pension payments will attract a marginal tax rate less a 15% tax offset.
BT Super and Insurance
Another feature of BT Super for Life is the inclusion of affordable life insurance to ensure that you and your family will be protected financially when disaster strikes. This insurance cover protects you anywhere in the world, all year round. The following types of cover are available:
- Death Benefit. This pays a lump sum if you die or are diagnosed with a terminal illness.
- Total and Permanent Disability Benefit. Under this cover, you’ll receive a lump sum benefit payment if you become totally and permanently disabled.
- Salary Continuance Insurance. Sometimes referred to as income protection cover, this insurance provides a monthly benefit if injury or sickness keeps you out of the workforce for an extended period of time.
If you become eligible to receive a benefit from your insurance cover, it will be paid from the insurer to the trustee of your super fund. BT Super for Life will then pay the benefit to you if you meet certain conditions of release.
Premiums for the insurance cover are deducted from your super balance each month. This means you won’t have to dig into your own pocket to fund your insurance protection, while premium amounts are based on your gender.
When you open a Savings account with BT Super for Life, you will automatically receive pre-approved cover for Death and Total & Permanent Disablement. You won’t have to worry about completing any health checks or complicated forms. The sum that you are insured under this standard cover varies as you age — for example, you receive $50,000 cover when aged between 20 and 24, or $125,000 of cover when you are in the 40-44 age bracket. However, you can request that your sum insured be doubled or tripled if you wish.Back to top
Tips for Getting the Most out of Your Super
- Consolidate your funds. Combining all your superannuation together into one account can help you build a significantly larger balance.
- Track down lost super. Many Australians have unclaimed superannuation that they are simply unaware of. Tracking down your lost super can help you enjoy a more comfortable retirement.
- Understand your investment options. With BT Super for Life, you can take charge of your investment asset mix or let BT take care of everything for you.
- Make contributions to your spouse’s super. Did you know that your spouse can make contributions to your super? If your spouse is a low income earner, you could also be eligible for a tax offset.
- Salary sacrifice. Putting a larger amount of your pre-tax pay into your super will help you grow a larger super balance.
- Extend your working life. If you want to build a larger super balance, consider extending your working life by working part-time.
BT Super for Life is a reliable online superannuation product with a range of useful benefits and features. It’s definitely worth considering if you’re looking for a solution to your superannuation problem, but make sure to compare BT Super for Life with other products on the market to ensure that you end up with the right super fund for your future.Back to top