It’s around this time that Australians receive their annual statement from their super fund
For many people, there’s not much of interest beyond how well their super performed over the past 12 months. But there’s value in reading your statement in its entirety and asking yourself the following key questions.
1. Are all your details correct?
One of the first things you should do when you receive your annual statement is make sure all your personal details are correct. Your phone number in particular is often requested as a security measure, as it can help your super fund retrieve your password if you get locked out of your account.
2. Are you happy with your super fund’s performance?
When looking at your super’s performance over the long-term, consider whether it’s been able to deliver returns in line with your expectations and objectives. It might be worth doing a side-by-side comparison with investment options offered by other funds, in case there are better returns available elsewhere.
Here’s where the ATO’s ‘YourSuper comparison tool’ may be useful. Just make sure to make like-for-like comparisons, and keep in mind that past performance shouldn’t be used as a measure for future performance.
3. Are you comfortable with your asset allocation?
Your annual statement should tell you what percentage of your super is currently invested in different asset classes (e.g. Australian and international equities, cash, property, fixed income, and private equity). This is known as your asset allocation.
How comfortable you are with your asset allocation will depend on a few things. For example, if you have a shorter time horizon and want to preserve your capital, you might prefer defensive asset classes such as cash and fixed interest.
If, on the other hand, you have a longer time horizon and can stomach volatility, you might be more comfortable with growth asset classes such as property and shares.
4. Do you need to change the insurance you receive?
Your super fund may have offered certain types of personal insurance (such as life, total and permanent disability, and income protection insurance) as a standard inclusion when you signed up. But given the nature of automatic cover, there’s a chance yours may no longer be appropriate.
If your situation has changed in the past 12 months (for example, you’ve gotten married, changed jobs, received a raise, had kids, or taken out a mortgage), you might find the type or level of insurance you’re receiving through super will to be adjusted. Consider contacting your super fund to see if you can amend your existing insurance or apply for another, more suitable policy.
Just keep in mind that your fund will likely inquire about your health and lifestyle, and if you’re deemed higher risk you might only be offered partial cover (or denied cover altogether).
5. Have you listed valid beneficiaries?
Your super is a non-estate asset, which means it doesn’t automatically pass in accordance with your Will if you die. For this reason, it’s worth making sure (a) you’ve nominated someone to receive your super benefits in the event of your death, and (b) you haven’t selected a beneficiary your super fund won’t accept.
Outside of your legal personal representative (the executor or administrator of your estate), your super can generally only be paid out to a dependent (e.g. a spouse, child, or someone you live with, are in a close relationship with, and provide for financially).
You can also nominate multiple beneficiaries, but you’ll need to specify the percentage of money you’d like each person to receive.
Be mindful of the type of nomination you’ve made too. A binding nomination will be respected by your super fund so long as you’ve chosen a valid recipient and the nomination does not lapse. A non-binding nomination, on the other hand, will be considered but ultimately it will be up to the trustee of your super fund to decide who gets your money.
6. Are you paying more than you should be in fees?
The fees you pay cover the cost of managing your super account. They can include member fees, administration fees, investment management fees, contribution fees, adviser service fees, and insurance premiums.
Fees are often deducted from your investment earnings, so it might be worth examining each and asking yourself if the services they’re attached to are worth the cost.
If there’s anything in your annual super statement you’re uncertain about or would like to discuss, please get in touch.
Contact Carrick Aland’s award-winning Wealth Planning team on 1300 466 998 or visit carrickaland.com.au/wealth-planning/.
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