You should’ve received your super fund’s half-yearly statement by now. If you don’t usually pay much attention to super mail, here are five reasons to give your latest statement a close read.
1. Funds make mistakes
Super fund statements are just like bank statements and sometimes errors are made. For example, it’s worth checking that the amount of super guarantee shown on your payslip is the same as the amount listed on your super statement. A discrepancy may mean your employer hasn’t paid the right amount of SG or that payments have gone astray. It’s also a good chance to make sure information about fees and investment returns also add up. If you think you find an error, contact your fund or adviser and discuss it with them.
2. Are you in the right investment option?
Your circumstances can change and the investment option you chose last year or even five years ago may not be the best place to have your super now. Taking a few minutes to read your statements twice a year can give you an indication of how the investment option you’ve chosen is tracking, how much risk is involved and whether or not it’s still the right choice for your life stage.
If you’re younger, for example, high-growth, high-risk investments may be the best bet because in spite of short-term losses they generally make superior returns over the long-term. As you inch closer to retirement and have less time to make up for periods of short-term loss, you may want to move into more defensive investment options such as fixed interest and cash. You can discuss these choices with your fund and/or a financial adviser.
3. Do you have the right insurance?
Are your insurance needs taken care of within your super fund? How long is it since you checked that you have the right level of cover and the right types of cover for your needs. Most funds now offer death, total and permanent disability and income protection insurance. The cover offered is usually cheaper than you can obtain outside of super but your premiums can’t be claimed as a personal tax deduction. Have a look at how much you’re paying and whether you have adequate cover.
4. Are your beneficiaries up to date?
Check your nominated beneficiaries are still current. This is particularly important in the event of divorce or separation.
5. Does your fund deserve your business?
The most important reason for opening all information received from your super fund is to keep your eye on whether it is working in your best interests. Does it provide persistent and healthy returns? Are its fees reasonable? Are you paying for financial advice in the form of trail commissions and if so, are you getting any service for that fee? These are all questions you can discuss with your fund. It may seem like an eternity until you retire and access your super but it’s your money so why not make sure your fund is offering the best possible value.
-- By Jackie Pearson