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11 steps to check your super statement

11 steps to check your super statement

Big change has arrived thumb

Super statement is a little bit like your mortgage statement, lots of figures, terminology that most of us don’t care to understand, because they tend to be daunting and intimidating. 

But just remember, this is your money and while the balance might not be so high now, once you start paying attention to it, understand the power of super, and its long-term benefit, concentrate your efforts on growing it, and maximising the benefit, in no time at all, it will grow to a substantial amount, worth looking after.  

As Tony Robbins says: “Where attention goes, energy flows” and the same applies to your savings, investing and your superannuation.  

So today I will show you 11 step process to understand your superannuation statement and what’s more how to fix the problem if you find that something is missing. 

Superannuation statements are sent to you either annually or semi-annually, depending on the fund you are with. Personally, I think you don’t need that statement more than once a year, otherwise it often leads to information overwhelm or unnecessary stress. But when you receive that statement, you should check all points I list for you today.  

This is the exact process I go through, when checking my clients’ superannuation or pension accounts, to pick up any discrepancies or inconsistencies that could cost lots in a long run.

1. Personal details 

You might think that this is pretty obvious, but you’d be surprised how many mistakes I have seen, especially when superannuation plan is open through your employer and not by you personally.  

Incorrect spelling of your name, preferred name instead of your legal name as it’s listed on your driving license, or your passport or any other primary document that identifies you.  This is a common issue for foreigners, born in another country with non-English names and difficult pronunciation.  

This could lead to a serious problem of losing your super fund that will end up in unclaimed super basket. 

You also need to check all other details such as your date of birth, your address your email address. It might seem obvious, but often the obvious is exactly what we neglect checking. 

2. Tax File Number (TFN)

Surprisingly it is not compulsory to provide your TFN to a super fund, but why wouldn’t you? This is most likely the best identifier, in case all other information fail to confirm who you are, and that super savings in question belong to you.  

Your TFN will never be written on your statement as it is illegal for a super fund to disclose it on your statement or to any third party. Instead on your statement it says: “supplied” or “provided”. Without the TFN the super fund will be unable to accept any personal contributions from you, and the level of tax payable could be calculated incorrectly. 

If your personal details or your TFN are incorrect, this will create a big problem at the time when you wish to make any withdrawals, or if you pass away. This will be a huge problem for your beneficiaries, so fix it NOW, while you can do it personally. 

3. Employer Contributions 

It is easier today than ever before, to be able to check if your employer paid the correct amount of SG contributions for you in any financial year. If you need a refresher about rules around Super Contributions, here is the information you need: “Superannuation all you need to know” 

Unfortunately, every so often, we hear stories of some shonky businesses that are trying to get away from the responsibility of paying a correct SG to their employees. So please check your statements annually to confirm that you have received your full super entitlement based on your gross income or negotiated remuneration package.  

4. Personal Contributions

Very often, especially before retirement when we are trying to optimise savings, reduce tax or maximise income from different sources, big lumpsums could be contributed to super.  

If your intention was to make a non-concessional contribution, but on a statement you see that your contribution was treated as a concessional or vice versa, you need to start speaking with your super fund immediately. 

Something has gone wrong, and I hope it can be corrected as penalties might apply for contributions above allowable limits. Not to mention that the wrong type of contribution might provide a reduced level of benefit, unnecessarily paid tax, so it is important to ensure your contributions have entered super fund as intended. 

5. Account Balance

Your statement should first confirm the balance at the end of the last statement period for example 30 June of the previous financial year. Then it will specify any contributions that entered the fund in the last 12 months and investment earrings made within the last statement period, less any fees and taxes payable by the fund.  

If insurance is included in your super, then additionally you will have charges for your insurance premiums listed as well. The net amount after adding contributions and earning less all those payments that have been deducted is your final account balance at the end of the statement cycle.  

Please compare your current balance with the amount you had 12 months prior, to understand the progress of your fund. 

6. Your fees

As mentioned before, your super fund fees are disclosed in the area when calculating your final balance for the term, and those fees will vary dramatically between different super funds. I have created a full article “Super Fund Fees & Charges Explained”, so you can understand different types of fees payable by different super funds.  

One thing that I would like to add here is, that your statement might only be showing fees that are actually paid by that fund, called administration fees, however the management fees charged by investment providers are often well hidden somewhere very deep in a statement. So you have to check the full statement to find those management fees, which tend to be much greater than any administration fees. 

Well, I don’t really want to speculate, but I have a feeling that this is done, kind of intentionally. As they say: “Out of sight of our mind”. So compare your FULL fees with those of other super funds to know if you are in a correct fund, but if unsure or your statement is fuzzy or confusing, contact me for a check-up. 

7. Investment options 

Most super funds provide a range of investment options, but if you haven’t advised your fund of your choice, then most likely you have ended up in a default fund.  

The problem might be that such a fund not only will be restricted with investment choices, but investment mixture might be completely incorrect for the level of risk you are willing to take with your money, meaning the financial risk is either too high or too low for you as the investor. 

I see this very often, when during our discussion a client will underline to me many times the reasons why he or she is very conservative and cautious with money, and then upon my review I find that the super savings have invested in a growth-balance or even high-growth portfolio, with both being completely inappropriate for such a conservative investor.  

Unfortunately, this happens either due to lack of understanding or ignorance or just neglecting super as a “too hard to deal with” basket. 

Again, I keep repeating, this is your money, your future so either pay attention to your superannuation savings or have an adviser assisting you not only to check it all, improve and maximise your super, but also to help you understand those tricky superannuation options. 

8. Investment returns

Now it is the time to check how your investment has been performing over the period of the last 12 months. Personally, I wouldn’t be making any investment decisions based on just one year investment returns.  

But the time when you receive your annual statement is a great moment to be reviewing performance of your fund to be well informed and prepared. Please concentrate on comparing investment returns to its appropriate benchmark.  

If the performance is similar or better, your fund managers have done a great job, so you can be pleased with the outcome.  

Unfortunately, people often compare their super performance that that invests into a particular market or one type of assets for example Aussie shares, with super fund that has the highest performance in a previous year. 

What they may not realise is that the other fund was investing in a completely different market, different mixture of assets with a totally different risk profile.  

So comparison by purely concentrating on the level of returns and disregarding the risk factor is not only like comparing apples with oranges, but can be a very dangerous strategy. 

And please, don’t jump into last year winners, as not only you will lose every time on transaction costs front, but you will also constantly keep on buying investments at the highest price point, and you will dramatically increase the level of investment risk, while reducing your fund’s capacity for a good performance. 

9. Insurance premiums

As you get older, insurance can become a real drain on your super savings, so please check the level of insurance that is included in your plan. Leave whatever you feel is necessary to provide security for your family, however if your home is paid off, kids are off your hands, review if you still need that life insurance or that disability cover.  

I have seen situations when super fund was providing and still charging for an income protection policy, while clients retired and were no longer earning any income. That is just a complete waste of money. So make sure you only have the level of cover that you really need. 

10. Beneficiaries

I touched on this topic in: “Super Death Benefit gone terribly wrong”, although it is a very sad story.  

You will find however a good explanation of types of nominations that you can make within your super fund. Please do not leave your super savings to a change, or to a decision of the super fund trustee. Just check on your statement if the nomination is correct and according with your wishes. If not, just update it immediately. 

11. Your satisfaction with the fund

This is not really part of your super statement, but some reflection is a positive outcome. If you have several super accounts, maybe it is the time to compare them all through those points mentioned today and decide which of those super funds is the best. Sometimes it is to your benefit to consolidate, sometimes it is not. You should know that after having done your check-up.  

But if you don’t know, if you are still not convinced that your super is the one, or maybe you need to decide on best contributions strategy for the next year, or the investment choice, or you are unsure about the level of fees charged, or insurance included or not included, all those points are very important aspect of your super savings and your future retirement outcome, so take it very seriously. 

But if unsure, the best option is to speak with an expert that can assist, so feel free to contact me. 

Retirement is a Journey, not a Destination, so be well prepared for the Ride.  

By: Katherine Isbrandt CFP®
Money Strategist & Retirement Planner
Principal of About Retirement

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