Superannuation funds are trying all sorts of things to attract and retain members to their funds - including discount retail vouchers that boost your super balance every time you shop.
Guild Trustee Services, which runs pharmacy fund GuildSuper and Child Care Super, has launched a gift card discount scheme that has the potential to shake up the superannuation industry.
The discount scheme, called Supersuper, allows members of the two funds to earn cash rebates on their everyday shopping and to have the cash automatically paid into their fund.
Members who sign-up for Supersuper can purchase e-vouchers?or gift cards through the Supersuper site that they then spend on everyday shopping at about 100 participating retailers, including Coles and Woolworths, Myers and JB Hi-Fi.
A cash discount is calculated as percentage of every dollar spent, then goes directly into the fund member’s account.
The discount varies depending on the retailer, but the average discount across the retailers is 7.59 per cent.
Greg Everett, general manager of GuildSuper, says the program doesn’t cost members anything, nor do they pay more for their shopping.
Typical superannuation marketing programs ask members to make savings, such as giving up your daily coffee, in order to be able to put more into super.
“Members instead earn money from the money they’re already spending on everyday things like groceries, petrol and movie tickets, alongside bigger ticket items such as furniture and airfares,” Everett says.
As women tend to do more of the household shopping than men, they stand to be the biggest beneficiaries of the program.
The memberships of both funds are predominantly female. Women are often behind the eight ball in their retirement savings because of lower incomes, working part time and taking time out of the paid workforce to raise children.
Another interesting aspect of the Supersuper scheme is that low and middle-income earners could also receive a co-contribution into their fund from the government.
The amount of government co-contribution you receive depends on your income and how much is contributed to your fund, and several other factors.
It should be noted that a recent superannuation rule change allows you to claim a tax deduction for personal concessional contributions.
It involves extra paperwork, but provided you stay under the concessional caps, which includes compulsory super, you can claim a deduction for personal superannuation contributions.
Many higher earners will already be salary sacrificing through their employers up to the cap and therefore would simply allow the cash-back to go into their funds without claiming a tax deduction in their income tax returns.
The rule change extends the tax benefits of salary sacrificing to the self-employed and to those whose employers don't offer salary sacrificing.
You have to submit a valid notice of intent to claim the deduction with your super fund before you lodge your tax return.
Of course, of all this says nothing about whether the funds are good ones to be with in the first place.
All of the extra contributions to super made possible by the Supersuper scheme might not mean that much if the funds' returns are not up to scratch.
And it should be pointed out that the "default" MySuper options are "lifestage" options, of which I have been critical; though Guild Super and Child Care Super have other investment options that can be chosen.
It can sometimes be a fine line between gimmick and something of value when it comes to the funds' marketing, but this falls in the latter category.
Anyone wanting to take part in the scheme would have to be very careful to avoid some of the potential pitfalls that apply to gift cards and e-vouchers generally.
And those include making sure to spend the gift card to its full value by its expiry date, if it has one.