Most people can choose which super fund they’d like their super contributions paid into. You can go with your existing fund, your employer’s fund, or choose a different fund.
Your employer will give you a ‘standard choice form’ when you start a new job. This sets out your options.
What to look for in a super fund
When you’re comparing super funds, weigh up fund performance and the fees you’ll pay against other factors such as risk, investment returns, services and insurance.
Performance
Compare your fund’s investment performance over at least five years. Consider the impact of fees and costs.
Compare like with like. For example, only compare a balanced option with another balanced option, and try to use the same time period.
Low fees
All super funds charge fees. Fees are either a dollar amount or a percentage, or both. Either way, generally the lower the fees, the better. Fees are usually deducted monthly and also after an action such as switching investments.
Insurance
Super funds typically have three types of insurance for members:
- life (also known as death cover)
- total and permanent disability (TPD)
- income protection
When comparing the default insurance offered by super funds, look for:
- the premium rates
- the amount of cover
- any exclusions or definitions that might affect you
Investment options
Most super funds let you choose from a range of investment options.
Options usually include:
- growth
- balanced
- conservative
- cash
- ethical
- MySuper
Some funds will let you choose the weighting of different asset types or direct investments.
Services
Super funds may offer other services which attract special fees. These can be things like financial advice or arranging to split your super following a separation.
Compare super funds
You can find out about and compare super funds by using:
- the ATO’s YourSuper comparison tool, an online list comparing MySuper
products - the product disclosure statement (PDS) for each product offered by a fund
- super comparison websites offered by private companies
Don’t choose a super fund based only on its rating on one of the comparison websites.
It’s vital that you compare these features:
- Performance – how well the fund has performed over the past 5 years.
- Fees – admin, investment, buy/sell spread, transactions, switching, personal advice, insurance, any other fees and how often they are charged.
- Insurance – what cover is available.
- Investments Options – what options are available to you.
- Services – other services the fund offers.
Once you have the information you need, use our super calculator to compare how different funds will work for you.
When all feels overcomplicated, you can always hire a specialist. Our team of financial advisers and accountants will be happy to sort everything out for you. Contact us today.
Information source www.moneysmart.gov.au
