Superannuation dud funds to be revealed: here’s how to escape

Government performance testing of some superannuation funds has started, and savers can easily choose to change. Here’s how.

New superannuation rules that will staple workers to the first fund they join have created a fresh impetus for savers to take charge of their money.

The changes, to begin on November 1, follow last week’s introduction of performance testing and the government launch of a new comparison tool for widely-used MySuper funds.

Super specialists say this makes it easier for people to spot a dud fund, but there are drawbacks.

Australian Institute of Superannuation Trustees CEO Eva Scheerlinck says the reforms do not treat every fund member equally because only MySuper funds are measured in the first year before the system widens later.

“While some members will have access to information about their fund’s performance, there are thousands of super products that won’t be tested or included in the comparison tool,” she says.

Australian Institute of Superannuation Trustees CEO Eva Scheerlinck. Picture: Supplied.

“This leaves a large group of Australians poentially stapled to a dud fund when they next change jobs and unable to easily make an informed comparison.”

Scheerlinck says people without MySuper can contact their provider and ask for net return data over an six-year period: “that should allow them to – at least broadly – compare their fund with top performing funds in the consumer tool”.

CreationWealth director Andrew Zbik says your new fund can help you transfer and even though he’s a fee-for-service financial planner he says not-for-profit industry funds are a good idea for many people because they remain the top performers largely because of lower fees.

STEPS TO SWITCHING SUPER

• Examine your fund’s performance compared with its peers.

• Choose a new fund and open an account.

• Notify your employer to pay into the new fund.

• Move your super from the old fund to the new fund, which should be able to help.

Originally published as Superannuation dud funds to be revealed: here’s how to escape