FIN200 Assignment T1, 2018 Question: What do you think are the important factors that should be considered by tertiary sector employees when they are deciding whether to place their superannuation...

Superannuation contributions
Course Name
Course Date
Student’s Name
SUPERANNUATION CONTRIBIUTIONS        7
Superannuation Contributions
Introduction
Savings is one of the most important things that is required by the individuals today. The individuals are investing in different retirement schemes, which is highly encouraged in Australia. The Australian government is strongly emphasizing on investing in different schemes which can help the individual to save for their retirement. In this regard, the Australian government has mandated minimum contribution that needs to be made by an individual to the superannuation fund or the retirement funds by the employees as well as the employers.
In this report, we will analyse how different factors like time value of money and the other factors decide on different concepts of the retirement schemes. It discusses about the different retirement plans which includes the defined benefit plan as well as the investment choices.
The employees have increased the minimum contribution to the superannuation scheme from 3% to 9% by the year 2005. Apart from the employees, the employers are also required to contribute in the superannuation for the retirement benefits.
With this billion of dollars are being contributed to the super annulation schemes by the individuals across the Australia. In Australia, there are many companies which are taking care of the superannuation funds, one of the biggest companies is Unisuper Limited. It is one of the largest companies of Australia which manages and provides different services in respect to the superannuation funds for the service employees as well as the for the tertiary education sector in Australia which includes the universities, TAFE colleges and other educational institutes and colleges. The superannuation funds has become a flexible mode of investment where an individual can decide one of the forms from the two forms which is provided under the superannuation methods which includes: A defined benefit Plan and an investment choice plan.
Factors that affect the superannuation contributions:
There are different aspects which are considered when deciding on the factors which has affected the superannuation contributions. Superannuation is one of the means which can help the individuals to save for the retirement. This is the contribution that is made important and is deducted from the gross salary of the employees to invest in the fund. Some o the major factors that affects the superannuation contributions includes the regulations by the government, age of the employees, income group, risk willing to take and time value of money.
Regulations by the government:
The Australian government has made the contribution in the superannuation fund compulsory for all the employees across Australia. The current rate of contribution to the superannuation fund as mandated by the government is 9% of the total income that is earned by the employee.
Age of employee:
The age of the employees is considered as one of the factors which decides the contribution. The older people are seen to invest more and save more. They want to secure their futire thus with that intent they try to save more,
Income group:
The income earned by the individual is one of the major deciding factor for the superannuation fund. This includes that the employees with lower level of income usually have less contribution to the fund as compared to the contribution that is made by the individuals with higher income (Drew & Stanford, 2003)
Risk:
The individual who is willing to take more risk usually would prefer in contributing to the investment plans where the individuals can decide on the investment scheme as per the risk they are willing to undertake. The plans that can be undertaken by them includes:
· Secured funds where the government gives fixed interest on the investment done
· Stable funds where the is a small exposure of the domestic as well as the overshare shares and primarily the investment is done in the fixed interest and bond securities
· Trustee’s selection fund is the balanced fund investment which includes the investment in different set of assets and have the balanced investment for the domestic and the overseas contributions.
· Share investment is...