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Superannuation- a big decision

  1. woddonnee

    5,382 Posts.

    My super fund is being revamped and have to make a choice between the following.
    1. Stay in the current defined benefit plan (dont get the surplus)and get a multiple of my final salary, which would be around 7x.
    2. Get a share of the current surplus (about 10% of currrent value) and have no guaranteed payout but share surplusses if and when the occurr.
    Note- the fund has been a good performer and is fully funded, some of the current (large) surplus will be allocated to a buffer account in case of market slumps.
    The actuary recons the plan accounts for 2 sept 11 type events. So the purported worst case is that in a total collapse I would have to pay a "little" more.
    My brief thoughts
    I have a 8-18 years til retirement depending on how my investments and body fair.
    In scenario 1 I'm better off if
    The bears are correct and the market goes sideways or down.
    Inflation takes off (my salary included)
    It is nice to know exactly what I will get with no stress. The sum is not enough for a comfortable retirement but a good foundation.
    Scenario 2
    Well, if the market keeps going up stongly, Ill be in clover, sort of. My current funds, plus the extra 10% will compound.

    I guess it just depends on my outlook and the level of risk I like. I would be interested in any thoughts you would care to share.


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