FAQs: Reviewing your annual superannuation statement

Superannuation is a critical aspect of your personal financial planning and health, ensuring that you have sufficient funds for retirement. As the new financial year commences and superannuation statements arrive summarising prior year performance, it is vital to review your annual superannuation statement thoroughly.

Understanding the details in your statement can help you make informed decisions about your financial future and ensure that your superannuation is working efficiently for you. In this article, we will address some frequently asked questions (FAQs) that can guide you through reviewing your superannuation statement effectively.

Why has my superannuation has gone up?

Most people, when looking at their annual movements look at the balance at 1 July then at 30 June and if the balance has gone up, then they don’t look any further as their superannuation is growing. What you should look at is the ‘why’ behind why your superannuation has gone up. Has it gone up less than the contributions received from your employer? Or has it gone up by the contributions plus a positive return from investments? If your superannuation on 30 June has not gone up more than your contribution amount, then you may have made an investment loss which could mean you need to look at where your superannuation fund is actually investing your money.

Have I received all of the contributions I should have?

According to the National Audit Office, about $640 million is underpaid to superannuation funds each year. Whilst the vast majority of employers pay their superannuation obligations when they are supposed to, unfortunately not all do. On the subsequent pages of your member statement you should find a breakdown of what contributions have been received by your superannuation fund and when. Assuming you were with the same employer for the full financial year, you should have received at least four contributions paid before the 28 July, 28 October, 28 January and 28 March. If not, you should look into this matter further as you could have potentially been paid less then you are entitled to.

What investment risk profile/investment allocation is being used?

A lot of people set up their superannuation fund years ago when they got their first job. Since then a lot of your personal circumstances may have changed, therefore you should revisit the options you selected at the time and see if they still apply to your current situation. In particular, you would have stated your investment risk profile/investment allocation which advises your superannuation fund what type of investments you are comfortable with and where you would prefer they invest. This information should be stated on your member statement and should be reviewed on a regular basis. If you are unsure of what allocation/profile is best for you, a financial advisor should be able to help you or some superannuation funds have a risk profiler on their website.

What are my fees and charges covering?

When reviewing your superannuation statement, it’s essential to understand the common fees and charges that can impact your balance. Typical fees include administration fees for managing your account, investment fees for managing the fund’s investments, and the indirect cost ratio (ICR), which covers ongoing investment management costs deducted from investment returns. Additionally, insurance premiums are charged for any insurance cover you have through your super fund, such as life insurance or total and permanent disability insurance.

Be aware of fees that you might be charged without needing, such as advice fees for financial services you don’t use, buy-sell spreads for frequent investment switching, and exit fees for leaving the fund. Other charges to watch for include additional transaction fees for making extra contributions or switching investments and performance fees charged when investments outperform a benchmark. Regularly reviewing and comparing these fees can help you ensure your superannuation balance grows efficiently over time.

What is my super insurance actually providing me?

When reviewing your superannuation statement, check the details of any insurance coverage included with your super fund. This typically covers life insurance, total and permanent disability (TPD) insurance, and income protection insurance. Understand the premiums deducted from your account for these policies and assess whether the coverage aligns with your current needs. It’s crucial to ensure you are neither under-insured nor over-insured, as unnecessary premiums can erode your super balance.

Are my beneficiaries details up to date and correct?

Ensure that your superannuation statement accurately reflects your nominated beneficiaries. Keeping your beneficiary details up to date is crucial, as it determines who will receive your superannuation benefits in the event of your passing. Regularly reviewing and updating these details ensures that your current wishes are honored and can prevent potential disputes among family members. Confirm that all nominated beneficiaries are correctly listed and reflect any changes in your personal circumstances, such as marriage, divorce, or the birth of a child.

Make reviewing annual statements an essential practice

Reviewing your annual superannuation statement is more than a routine check; it is an essential practice to ensure your financial security for the future. By understanding the reasons behind changes in your super balance, verifying contributions, reassessing your investment profile, and staying informed about fees, insurance, and beneficiaries, you can make more informed decisions about your superannuation. Take control of your financial future today—review your superannuation statement in detail and seek professional advice if needed to optimise your retirement savings.

Ready to take the next step in securing your financial future? Review your superannuation statement today and make sure everything is in order. If you need assistance or have questions, don’t hesitate to reach out to a financial advisor for personalised guidance. Your future self will thank you for the proactive steps you take now.