How to read your annual superannuation fund statement
Reading fine print isn’t exhilarating, but understanding exactly how money is invested is vital for your financial well-being.
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Super statement season is here, and understanding how to read yours can be a ticket to saving money.
Superannuation funds have six months from June 30 to deliver annual statements in print or online depending on your choice – and most arrive around September.
If you ignore yours or are confused, you might lose money through fees, insurance or tax.
QSuper chief of member experience Jason Murray says there are many important things to check on your statement, but the standout is making sure your employer has paid your compulsory contributions of 9.5 per cent of your ordinary wage.
“While low fees and strong investment returns over the long-term will make a difference, they can only make a difference if you’re getting the money you’re owed,” he says.
Your statement should show any extra contributions you’ve made through salary sacrifice, other personal tax-deductible contributions, or personal after-tax contributions. Any super fund injections other than personal after-tax contributions have a 15 per cent contributions tax applied to them.
Murray says your statement will show your opening and closing account balance for the 2019-20 financial year.
“Ideally, your statement should also include a snapshot of your account over the past five years so you can see how your retirement savings are tracking over time,” he says.
Fees eat into your retirement savings and will be outlined on your statement. If you’re paying more than 2 per cent of your total balance in management costs, investment fees and member fees, you are likely to be paying too much.
Colonial First State general manager Kelly Power says your super should be examined more than once a year, but the annual statement is a good chance to check your balance, personal details, contributions, life insurance costs and beneficiaries.
Rule changes in recent years have resulted in “a significant number” of life insurance policies in super being cancelled in low-balance or inactive accounts, Power says.
“Check you are comfortable with your level of cover and premiums paid,” she says.
Many super fund members will see a COVID-induced negative return on their investment for the 2019-20 financial year.
“That will potentially be confronting after years of strong returns,” Power says.
“Recognise that it is a long-term investment and don’t react to short-term market volatility. Markets bounce back.”