Can I open a super account for my young grandson?

Now that I have a grandson, I would like to open a superannuation account for him and make a contribution of $1,000 each year until he is 18 in the hope that the compounding earnings will set him up well in retirement. Do you know of a superannuation fund that offers these accounts and whose fees are low enough that the $1,000 will not be eaten up in fees?

I have been trying to join him up to Australian Super for four months, but they are impossible to communicate with. You must upload all communications onto their website, but unfortunately, it limits the size of the document that you can upload and that limit is smaller than the application form they sent me. So I replied to their email address with the form, but it has been ignored. I have tried ringing and waiting online only to be directed to a form that turned out to be the wrong one. I have given up on them.

Some super funds such as Australian Retirement Trust (ART) allow for accumulation accounts to be opened for those under 18. ART requires the parent/guardian to sign and submit the application form which can be found at the back of the accumulation account PDS.

Probably a more important point here though is that the fund won’t be able to accept these personal contributions unless the grandson has a Tax File Number (TFN) that has been provided with the account application.

If no TFN is provided, the ATO requires any personal contributions must be returned. This is different from employer (mandated) contributions which can be accepted without a TFN, though significantly more tax is deducted from those contributions.

All APRA super funds are required to adhere to the three per cent cap on low-balances (balances under $6,000). This is commonly called the low balance fee cap and requires super funds to refund all administration and investment fees and costs exceeding three per cent of an account balance under $6,000 as at 30 June each year. This means on a balance of $1,000 the maximum fees and costs would be $30.

I am a 75-year-old widow with an estranged daughter. I live in my own home, debt free and with a superannuation fund worth $260,000. I am on a full aged pension and withdraw minimum fortnightly amount from super but have spent a significant amount of the original figure setting my house up for the future, including a granny flat. I now plan to rent this out to the limit allowed to keep my pension. I’m keen to put some small amounts of money into index funds as a way of saving for my funeral and wonder how this would affect my pension. I have good genes and live healthily so need to stay financial for 20 + years.

Investing regularly into an index fund is a great way to keep abreast of the market, and it’s a good way to save small amounts. It should have no effect on your pension but when the money grows you may consider pre-paying for your funeral or taking out a funeral bond.