Superannuation is your money. We have all heard that before and it’s true. It is about 9.5% of your wages being put away for your retirement.
I think of my superannuation as both a bank account and investment account. Like a bank account, I always look at the balance and want to see it increasing. As an investment account, I can choose to some degree how my money is being investment and get rewarded for my strategies.
As an employee you should actively monitor your superannuation and monitoring doesn’t necessarily need to take a lot of time.
Check you are getting paid. Employees should be checking that their employer is paying superannuation and paying it on time. Check your superannuation fund to ensure that your superannuation is being deposited to your account on time. There may be a little bit of timing difference (no more than about a week) between the time your employer pays your superannuation and the time it takes to appear in your fund. If you are on an award that says your superannuation is paid monthly, make sure it is being paid monthly.
Check you are getting paid the right amount. Superannuation can be complex to understand. It is not just a flat 9.5% of wages which needs to be paid to superannuation. Some wage categories such as overtime are exempt. There is a minimum amount you need to be paid in a month before getting superannuation. There is a maximum amount which can be paid to superannuation each quarter. It can be confusing. Your pay slip should say how much superannuation you are to be paid. Look at this figure and if you are unsure how it has been calculated or what wage categories are included, ask your payroll department. That is what they are there for.
Check your superannuation fund investments strategy. Most superannuation funds have a portal you can login and check how your money is being investment. You can usually choose what percentage you want invested in the different strategies. Each strategy has a different risk and different potential return associated with them. For example, cash has a low risk and low return while international shares may have a higher risk and a potential higher return. Check out the different options your fund provides and decide on what strategy will work the best for you. You can usually change your investments at any time. You may want to talk to a financial professional to determine which strategy is best for you on your goals.
Check what you are paying for. You cannot avoid paying fees to superannuation funds. In general, they do provide a good service and they need to be regulated and audited and they deserve to be paid for the services they provide to us. Within saying that, different superannuation funds do have different fees and do provide different services. Talk to them about the fees and services they provide and how they invest your money.
Check for lost super. If your superannuation account has not had any contributions for a while, the superannuation fund transfers the funds to the ATO’s lost superannuation account. The ATO makes it very easy to check for this lost superannuation and to transfer it to your usual superannuation fund. To check for and transfer lost superannuation, log into your myGov portal and check under the ATO’s section on lost superannuation You might be surprised as to what you find. I combined all my superannuation years ago, but when I checked on myGov, there was more than $2,000 there!
Combine superannuation accounts. The more superannuation accounts, the more fees you pay. If you combine your superannuation accounts into the one fund, you will only be paying fees to one place. You wouldn’t pay bank fees by having multiple bank accounts open and not being used so why would you pay monthly fees to multiple superannuation funds not being used. Research superannuation funds and choose the best one for you. Once again you may want to talk to a financial professional to determine which strategy is best for you on your goals.
Trevor Cairney CPA