It was recently reported that (according to the Australian Bureau of Statistics) almost 10 per cent of Aussie workers –...Read More
Have you heard of the Australian Prudential Regulation Authority, or APRA? It is responsible for regulating financial institutions, including superannuation funds. Among other things, it assesses super fund fees performance, and gives them a ‘pass’ or ‘fail’. Last week, APRA published its ‘naughty list’, identifying 13 funds – of 76 graded by APRA – that failed to pass the performance test. Not only that, it also identified those funds that only ‘marginally passed’ (we don’t think this would impress Santa!). Why should you care? The majority of working Australians in MySuper investment products, which form the main focus of APRA’s analysis. More than 1 million Australians will now receive a letter “urging them” to switch where they invest their super.
We all know that super means putting money to away to secure our future financial wellbeing. However, people often don’t know that they have insurance through their super fund, including for total and permanent (TPD) insurance and income protection insurance, that could be critical if you’re unable to work because of illness or injury. APRA’s efforts are part of a broader suite of reforms geared at improving accessibility and awareness around super. This is to be applauded, but it can also be confusing to figure out what these changes mean for you and your retirement savings. We don’t think that’s right – super is your money, after all! Let Littles break it down for you.
The ‘Your Future, Your Super’ reforms involved two key measures: ‘super stapling’ and the ‘YourSuper’ comparison tool.
Super stapling, TPD insurance and what it all means for you – Littles
If you’re starting a new job in 2021, you need to know about changes to super! – Littles
Littles cheat sheet: What you need to know about recent changes to super – Littles
If you’ve started a new job, you might know that previously, if you didn’t tell your new employer what super account you’d like your contributions paid into, they could automatically pay them into a new account of their choice. As a result, many people ended up with multiple different super accounts that they were often unaware of or forgot about. This is all changing! From 1 November 2021, if you don’t nominate a super fund when you start a new job, your employer may have to check with the Australian Taxation Office (ATO) and ask if you have an existing account from a previous job. This new process is being called ‘super stapling’ and means that you have a ‘stapled super fund’, which will follow you through various jobs.
Thinking about changing super funds, or joining a new fund? The YourSuper tool allows you to compare MySuper super funds so that you can choose a super fund that meets your needs. YourSuper uses information collated and supplied by the Australian Prudential Regulation Authority (APRA) and
· displays a table of MySuper products ranked by fees and net returns
· allows you to select and compare in more detail up to four MySuper products at a time
· links you to a super fund’s website when you select a MySuper product from the table
· can show your current super accounts alongside other MySuper products – if you access the personalised version through myGov, and
· provides links to help you consolidate your super accounts.
We think it’s great to provide accessible, transparent information about super funds so that you can assess it against your own personal circumstances and needs. However, remember that before you close an existing fund, or move to a new fund, it’s important to carefully consider any impacts that doing so may have on your insurance. Many people do not know that they are often insured for things like TPD and income protection insurance through their super. Policies differ between funds and you should make sure that you won’t be worse off – whether it’s because your new policy has stricter definitions, or excludes pre-existing conditions.
If you’ve got a question about how changing super funds could affect your insurance, get in touch! At Littles, we are super experts and can do a free super check so you that you know which super funds are in your name and what insurance coverage they provide.
Do you have an injury or illness that prevents you from working, or just want to know more about what insurance you have under your super? Get in touch with Littles for a free super claims check. We can help you understand what you’re entitled to. Know where you stand, and get peace of mind.