1. Home
  2. Super 101

Super 101

Now that your Superannuation is Halal, it should be treated as a valuable financial asset. After all, it is your second biggest financial asset after your home. We suggest you save this page to always refer to since it will address most of the questions you may have during your journey with Hejaz!

 

Why should I contribute to Super?

Some Super contributions (employer contributions, concessional contributions & salary sacrifice) and the investment earnings within Super funds are taxed at 15%. As this is lower than the marginal tax rate for people earning more than $18,200 per annum, less tax is paid on the money going into super than if it was paid to you as normal income. The higher your marginal tax rate, the greater the benefit.

 

Why is contribution tax paid on Super?

Contribution tax is the mandatory 15% tax payable on all employer contributions, concessional contributions & salary sacrifices. This is automatically deducted once contributions are received. The ATO website has further information on this.

 

Who is AMG Super/Freedom of Choice and how does it have a relationship with Hejaz?

AMG/Freedom of Choice is a third-party platform used by Hejaz for compliance and administration purposes. Legally, Hejaz cannot hold client funds directly and require funds to be held in a compliant platform. Hejaz only manages and invests member funds in a sharia-compliant manner.

Many of the Hejaz Islamic Superannuation and Investment products are available on the AMG Freedom of Choice platform, particularly our flagship product – Hejaz Global Ethical Fund.  AMG/Freedom of Choice Super does not manage or invest client funds, rather they simply carry out administrative and compliance functions.

 

Fund Details

Fund Name: Freedom of Choice

Fund Australian business number (ABN): 300 993 205 83

Unique superannuation identifier (USI) / Superannuation product identification number (SPIN): ETS0003AU

Postal Address: PO Box 3528, Tingalpa DC Qld 4173

 

When can I expect to receive my annual Super statement?

Super statements are prepared once the financial year ends and sent out towards the end of the year. Once statements are available these can be viewed online.

 

When can MyGov update Hejaz Super details?

Super funds and platforms update ATO once a year (around October) and it will be reflected on the ATO portal automatically.

ATO will not have updated balances on Superannuation accounts, the reported balance reflected is from the latest end of the financial year. If you wish to obtain updated details on your Super account, then please log into your online account.

 

How to conduct a Super search or transfer other Super accounts you may hold into your Hejaz Super account?

By logging into MYGOV and then referring to ATO Services > Superannuation you will be able to see the reported Superfunds. You can either transfer your Super manually into your Hejaz Super account or provide your Super details (Super fund name, member number, and approximate balance) to us via email so we can initiate the transfers.

 

When can my employer contributions be reflected in your Hejaz Super account?

Super guarantee payment will be stated on your payslips, however, Super contribution payments are processed either monthly or quarterly. Your employer does not make Super contribution payments with your fortnightly payment (in most cases). You will need to consult with your employer as to when super payments will be credited to your super account.. All Super payments are done electronically via a clearing house.

 

How can I take out the interest earnt in my Super before rolling over to Hejaz?

You will not be able to determine how much interest or non-sharia compliant investment earnings have been generated during your time in a non-compliant Superfund. It is just not the interest that is not sharia-compliant but also returns and income generated from non-Sharia compliant investments within super. This makes it virtually impossible to determine the amount that you should omit from the fund.

Even if you were to determine this amount, you cannot remove this from your Super due to the Super regulations. You may just want to provide a certain amount to charity when you can access your Superfund in retirement, to ease your conscious.

Due to your good intentions, may Allah excuse and reward you for this thought. You do not have to worry too much about what has happened prior to you not knowing there were Islamic alternatives for Super. Now that you know, it is your duty to ensure your retirement fund is always Sharia Compliant moving forward.

 

The amount of Super received by Hejaz is different from what I had in my previous Super. Why the discrepancy?

When confirmation emails are sent to members to confirm the amount of Super that has been received and allocated from their previous fund it is just us confirming what we have received. We won’t know the reason for the discrepancy and you will need to discuss this with your previous fund. Generally, the difference is from the mandatory 15% tax applicable on all Super contributions, market movements, or final fees deducted.

 

I have experienced loss when my funds have rolled over.

When you initially invest in a fund you will experience short-term fluctuations in your account. This is common with any investment unless it is a fund that provides a guaranteed fixed return. A fund that provides a guaranteed fixed return is not sharia-compliant.

The ideal time frame to evaluate the performance of an investment over a 12-month period. In the context of super, considering the long duration of investment, an assessment of performance over a 3–5-year period is advisable, as underlying investments are selected based on their expected performance over this duration.

Investment markets function in cycles that include many ups and downs. Within these cycles, there are opportunities to acquire under-priced investments and sell over-priced ones, but this only truly benefits those who remain invested in the product. By adopting a long-term investment attitude, you allow short-term fluctuations to be smoothed out over a longer-term investment period. This is most relevant in the context of superannuation investments, considering the naturally long investment duration to retirement for most members.

Please refer to the below chart that powerfully illustrates how sticking to a long-term investment plan, with diversification across a range of asset classes, allows you to grow your wealth even in the face of market crises and short-term volatility.

Below are some golden rules of the stock market and investments:

  • Never get emotional
  • Do not panic on short-term falls
  • Focus on future
  • Do not sell prematurely and realise loses
  • Do not place funds into cash during market volatility
  • Hold your nerve

 

How do you manage risks in investments?

There is an element of risk in all investments, whether in property, shares, gold, or any other asset. Risks can never truly be eliminated, rather they can be managed. Moreover, a risk-free investment with guaranteed returns would contravene Sharia principles which require an investor be exposed to both profit and loss.

Risks are managed through diversification, robust investment analysis, and active asset management.

 

When can I access my Super?

Super benefits are subject to withdrawal rules and if you meet a condition of release. Generally, when you reach your preservation age and retire. If you are between the age of 60-64 you will need to be retired to access your Super and if you are above the age of 65 regardless of if you are working or not you can access your Super.

You can also access super in some special circumstances, including:

  • Compassionate grounds
  • Severe financial hardships
  • Terminal medical condition
  • Temporary incapacity
  • Permanent incapacity
  • Super less than $200
  • Temporary resident departing Australia

You may obtain further information on the ATO’s website

 

What will happen to my Super if I leave Australia permanently or indefinitely?

If you are an Australian Citizen or Permanent Resident, your Super account will remain the way it is. There are no options to reduce or freeze the ongoing admin fees since funds will still be invested and potentially grow due to investment returns. There are no options for closing the account or stop fees. You may review any insurance you have, linked to your super, to minimise cost or even consider making additional contributions into your Super to offset any ongoing insurance premiums and admin fees. Generally, investment returns can cover the ongoing cost of your Super and even leave you with profit without entirely relying on your employer or additional contributions.

 

Departing Australia Superannuation Payment (DASP)

If you are a former temporary resident who accumulated superannuation while working in Australia, you can claim your Super from your super fund if all of the following are met:

  • You entered Australia on a temporary visa listed under the Migration Act 1958 (excluding subclasses 405 and 410)
  • Your visa is no longer in effect
  • You have departed Australia
  • You are not an Australian or New Zealand citizen, or a permanent resident of Australia.
  • The payment is called a departing Australia superannuation payment (DASP)

 

What are the different types of insurances Hejaz offers within Superannuation?

Hejaz offers Family protection, illness recovery, Critical care, and Loss of Income within Superannuation.

  • Family Protection In the event of your premature death then your beneficiaries will receive a lump sum payment plus your Superannuation.
  • Critical Care In the event of you becoming totally and permanently disabled and you can no longer work then you may receive a lump-sum payment.
  • Loss of Income: Can pay up to 75% of your income as a monthly benefit payment, if you were unable to work for a period due to injury or illness. If you resume back to work, then payment will cease. Please be aware there are features within income protection such as benefits and waiting periods.

The benefit period is the time the monthly benefit can be paid until. You can select 2 years, 5 years and until age 65.

The waiting period is how long you need to wait until your income protection monthly benefit can commence. You can select 14 days, 30 days, 60 days, and 90 days.

 

How much does Hayat Protection cost with Hejaz?

We tailor your Hayat Protection to your personal financial requirements and objectives. In doing so, we consider a variety of factors such as age, smoker status, occupation, health, types of cover being sought, and levels of cover required. Your insurance costs are determined on this basis.

Some Hayat Protections can be connected to your super and paid therefrom. This helps to reduce constraints on personal cash flows. The flow of premiums and claim payments is shown in the diagram below.

 

Updated on July 1, 2022

Was this article helpful?