Do you know if you are with the best superannuation fund for your situation? Or have you been with your default super fund since you were 16? Many people don’t realise that the default superannuation fund they are a member of often isn’t necessarily the best optionfor them – and there is no obligation to the employer to offer you the best alternative.
“All an employer is obliged to do is put you in a default fund that complies with the law and has a tick of approval from the superannuation regulator, the Australian Prudential Regulation Authority (APRA),” say Alex Dunnin, Executive Director of Research and Com-pliance at Rainmaker Group.
If your employer is paying you the right amount of super at the right time – they are upholding their legal obligation. With so many superannuation funds available, it can be hard for an employer to distinguish the best option for you or even allocate the resources to look into it.
The decision you make in regards to your super fund can greatly impact your retirement income and adversely affect your future financial security. In fact, according to Rainmaker, you could be as much as $876 000 out of pocket by the time you retire!!
“There’s such a big range in performance between the top and bottom funds. Some of the good funds do two or three times betterthan the worst ones no matter what period you look at. That’s why it matters what fund you’re in,” says Dunnin.
What can you do to improve your Superannuation fund? Have a look at the following checklist.
- Do you trust the institution behind the fund? Does it have a good track record?
- What are its investment returns like? No one can predict future returns, but past returns, over five to 10 years, are a good indicator of a good fund.
- Finally, check your superannuation funds fees! These can eat into your super. According to Dunnin, you should not be paying more than 1% in total In many cases the fees are not transparent and not easily understood by members.