Aussies urged to consider super options

·2-min read

With a million-plus Australian super fund members recently made aware they aren't keeping up with the Joneses, the push is on to do something about it.

The Australian Institute of Superannuation Trustees (AIST) wants people to carefully consider their options after testing resulted in 13 MySuper products classified by the regulator as underperforming.

The funds were given 28 days - until September 27 - to notify members of the result.

The edict preceded rule changes which will see workers who take up new employment lumbered with underperforming funds should they fail to opt for better ones.

Under the previous system, most people who changed jobs and didn't nominate a fund were usually automatically defaulted to one considered a high performer, says AIST advocacy manager Melissa Birks.

"But as of 1 November, these people will be stapled to their existing fund, regardless of whether it is a strong or poor performer."

Ms Birks says with many people disengaged with their super, they may not have read the underperformance notification they received from their fund.

"We are particularly concerned about vulnerable members who may not be in a position to act on the information provided," she said.

The new super rules are part of the federal government's Your Future Your Super reforms which came into effect in July and require the superannuation industry to improve efficiency, transparency and accountability.

Ms Birks says in deciding what to do next, people should make use of the ATO's Your Super comparison tool which considers fees and shows net returns.

Additionally, they need to take into account the fact switching funds causes insurance with existing funds to cease.

AIST remains concerned that the government's reforms don't treat all fund members equally because only MySuper products are assessed in the first year.

There are thousands of super products yet to be tested or included in the comparison tool.

"This leaves a large group of Australians potentially stapled to a dud fund when they change jobs after 1 November," Mr Birks said.

"Unfortunately, it's likely that this will happen to many, many Australians and will have a detrimental impact on their retirement savings."

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