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Friday, 1 February 2019

QFF points for saving for my retirement

I received an unusual offer via email the other day - I could receive 20,000 Qantas Frequent Flyer points if I opened a superannuation account online with AustralianSuper using the provided link, and contributed $350 within six months.

I already have a SMSF (low cost admin/audit annual fee of around $900, with the cost shared across my account and that of DW and DS1) for the bulk of my retirement savings, and an account with the super fund specified by my employer (as they subsidize the admin fee, so its quite low cost, and they also pay the premiums for a fixed amount of life insurance within that fund, so the admin cost is less than the value of the insurance premiums benefit I receive). So the main question when deciding whether or not to take up the AustraliaSuper offer was how much will the account cost compared to the value of the QFF points? The fund has a fixed admin fee of $1.50/wk, which is rising on 30 March to $2.25/wk. There is also a $35 'exit fee'. So, if I keep the account open for five months (the QFF points are supposed to be allocated within 2-3 months of making the $350 contribution) and then rollover the account balance to my SMSF it will end up costing around $1.50x9 + $2.25x13 + $35 = $77.75. 20,000 QFF points are worth between $132 and $456, depending on what flight or 'Qantas Store' product the points are eventually redeemed for. For most domestic economy flights, 20,000 points are worth around $280 of travel. The points are 'worth' a lot more when used for upgrading economy international flights to business class, but that isn't something I'd actually spend cold, hard cash on. Overall, the 20,000 points are probably 'worth' around $280 to me, so my net gain for taking up this offer is around $200. Of course I am also locking away that $350 until I reach preservation age and can withdraw money from my superannuation, but that isn't too long to go now...

Anyhow, I decided to take up the offer. It took about 5 minutes to complete the online application process, and the BPay details for making a contribution were available the following day when I logged in to my new account. I did a BPay of the $350 personal contribution the day after I opened the account, and the funds were reflected in my balance the next day (I invested 50% in Australian Shares and 50% in International Shares) - which had gone up to $351.25. I'll wait an see when the promised QFF points get credited, and then do a rollover application. All in all, a fairly quick and painless way to 'earn' an extra 20,000 QFF points.

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