Australians are being urged to do one thing that has the potential to boost their super by tens or even hundreds of thousands of dollars.
Australians are being encouraged to check if their super accounts are performing this year, after a comparison tool launched five months ago reached the milestone of one million hits online.
Superannuation Minister Jane Hume said the online resource, which was launched in July, held super funds to account and named and shamed underperformers.
“Australians work hard to earn their wages, and of course superannuation is deferred wages. We will always put Australians first, not fund managers,” said Superannuation Minister Jane Hume.
Thirteen MySuper products failed the Government’s new bright line performance test covering a million member accounts.
The MySuper comparison tool enables Australians to compare their super fund against other default products on an apples to apples basis.
“The fees you pay today can mean tens or even hundreds of thousands of dollars difference in retirement. As Einstein observed, compound interest is one of the most powerful forces in the universe- a small change in your super today can have very lucrative pay-offs many years down the line,” said Superannuation Minister Jane Hume.
The online tool illustrates that for a person aged 30 who has $70,000 worth of super there are nine funds which “underperform” based on information supplied by the Australian Prudential Regulation Authority.
One of the super funds was Maritime Super, a fund that was charging $1010 a year, according to the website, while giving a person a seven-year net return of 7.13 percent.
Energy Industries Superannuation Scheme was also classified as underperforming, charging $623 with a net return of just 5.96 percent.
Meanwhile, on the other hand , “performing” account Unisuper charged an annual fee of $418 and had a net return of 9.17 percent over seven years.
Australian Super charged $586 but had a net return of 9.41 percent.
Xavier O’Halloran, who works as the Director of Super Consumers Australia at CHOICE, said that new tool was making a “major difference”, describing it as a game changer.
“It’s the first time Australians have been able to get a good sense in one place about how their super is performing. If you look at the funds that underperformed, our analysis showed it was more than double the number of people leaving them than in previous years. The differences (in paying attention) are massive,” says Xavier O’Halloran the Director of Super Consumers Australia at CHOICE.
Mr. O’Halloran mentioned a Productivity Commission estimate that that there could be a $660,000 difference between a worker in a bottom quartile fund compared to an identical worker in a highly performing fund.
He advice was to type in your own personal circumstances and age then look at whether the fund was classified as performing or underperforming on the website.
“So, look at whether the fund has failed the performance test or not, then look at the fees once you’ve fed your actual balance into the tool. Then I would look at the performance lastly,” said Xavier O’Halloran.
Xavier O’Halloran said that getting more people to use the tool would be a huge focus for 2022.
“Making sure people get in and use the tool that’s available, it will worthwhile that being reviewed to see if enough people are directed to it and know about it,” concluded Xavier O’Halloran the Director of Super Consumers Australia at CHOICE.