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Members of the Anglican National Superannuation Plan can rest assured that they are making a real difference to the lives of people in Australia and abroad through the way their superannuation is invested.
Sometimes it's surprising what can be achieved with a little thought and vision " even when it comes to investing. The socially responsible investing approach couples the goal of maximising investment returns with the goal of maximising the social good, by considering how (and in what) funds are invested.
The Anglican National Superannuation Plan operates in a way that is compatible with the Anglican community's values of being caring, faithful and honest, and operating with integrity. For over 45 years the Plan has pursued an ethical approach to investing its members' funds. The approach started by avoiding investments in organisations with recognised high negative social impact such as the production or manufacture of socially harmful products, like tobacco, alcohol, gambling, armaments, uranium and pornography. This has been expanded through its partnership with AMP to include positive engagement with organisations across a range of areas including:
"¢ Ethical considerations meeting fundamental human rights, articulating and implementing a code of conduct,
"¢ Labour standards including Occupational Health and Safety, International Labour Organisation standards, working conditions and exclusions on child labour.
"¢ Social considerations including indigenous relations and community involvement
"¢ Environmental considerations including energy and resource use
"¢ Governance considerations " including meeting corporate governance guidelines on board structures and remuneration.
Through this feature over the coming months we will endeavour to illustrate how these principles have had real life influences in communities around the world.
This month an answer is offered to a common question asked by people with mortgages" . Is it better to pay down the mortgage or invest more in super?
Mortgage versus super: take a different approach
For many people, their first thought when they come into extra money is to plough at least some of it into the mortgage - but this strategy isn't always the right one.
It can be beneficial for people to make additional contributions to their superannuation through salary sacrificing (where people divert money from their wage into their superannuation fund before their wage is taxed).
The benefit here is they are then taxed at only 15 per cent (the current tax charged to put money into a superannuation fund) and not at the much higher rates many people pay through income tax.
When thinking about whether to pay down their mortgage or invest more in super, people could consider switching from paying the principal and interest on their mortgage to interest only, and using the surplus money to invest in superannuation via salary sacrificing before the money is taxed.
The extra money isn't made by the growth of the superannuation investments - it's made by a higher net amount being invested because income tax has not been removed from the
money invested.
Using this strategy, when the person reaches retirement age, they could have made enough money to pay off their mortgage in total, and have additional assets inside super
to help fund their retirement.
In general, this strategy may be more suited to people 50 years and above because the obvious trade-off is that money invested in superannuation is locked away until retirement.
This strategy isn't for everyone, so people should seek advice from an accredited financial planner before making any investment decision.
Who can join Anglican National Super?
Plan membership is available to every person (along with their spouse and family member) employed with an Anglican Organisation and a select group of likeminded Christian organisations.
