Looking to reset your super in 2022? Here’s what you need to know

Did you know that most superannuation fund members saw a “big improvement in their retirement savings in 2021”, with returns four times higher than the previous year?  It has been reported that a typical “balanced” super fund – where most workers have their retirement nest eggs invested – returned 13.4 per cent in 2021, up from just 3.3 per cent during 2020 when COVID hit. However, not all super funds are created equal, and not all funds benefited from this upswing. There have been a lot of changes to super rules and requirements in the last 12 months that are designed to help you better manage your super. This blog reminds you about the important things you need to know to ensure that your super fund is working hard for you. 

Super stapling makes choosing the right fund more important

Since 1 November 2021, if an employee does not nominate an account at the time they start a new job, employers will pay their super contributions to their existing fund. Employers will access information about the new worker’s existing super fund from the Australian Taxation Office (ATO). The “stapling” change is an Australian Government initiative intended to avoid a situation many of us know well – workers ending up with multiple super funds being eaten up by administrative fees and charges, leaving them potentially worse off in retirement. No more trying to hunt down old super funds! However, it has been pointed out that that members of poorly performing funds will remain with the duds each time they change jobs – locking in the under-performance of their retirement savings. Stapling also means that you will be more reliant on one fund to deliver on all of your particular needs – now and in the future. Of course, you can still choose another fund at any time. 

Read more here: Super stapling, TPD insurance and what it all means for you – Littles

Did you know your super fund now gets graded?

If you’re wondering whether you should make the jump to another fund, there’s never been more information available to help you decide. You might remember that late last year, the Australian Prudential Regulation Authority or APRA published its ‘naughty list’, identifying 13 funds – of 76 graded by APRA – that failed to pass the performance test. 

Read more here: Is your super fund on APRA’s naughty list? – Littles

It might be worth talking to a financial expert about your super needs, including insurance that you could require. You can also access information about how funds are performing on the ATO website using the YourSuper comparison tool. It is important to compare ongoing fees and charges of your fund, research its long-term performance, and consider the insurance options available for you.

Insurance through your super fund

It is important to take stock of your insurances as your life changes, as you may find you are not covered for what you expected when the unexpected happens. If you move to a new super fund, be sure to compare the changes and expect to have new wait periods on new policies. Super funds typically have three types of insurances policies attached to them. They include:

  • TPD insurance, which covers you if you are unable to work because of illness or injury. TPD insurance products differ from super fund to super fund
  • life insurance, which can provide a lump-sum payment to your super fund if you die or become terminally ill. It can assist your family or loved ones to pay for financial costs and future living expenses, and
  • income protection insurance, which can provide temporary payments or benefits if you are temporarily unable to work because of illness or injury.  

FYI: The ‘super stapling’ change is part of the broader ‘Your Future, Your Super’ reforms that  the Australian Government introduced in 2021 that are designed to create greater transparency around super, and how your super fund is managing your money! The idea is that less fees and charges equals a higher super balance, leaving you better off in retirement. These reforms are complemented by another package of changes called ‘Putting Members’ Interests First’ which are designed to ensure that people with super accounts that are inactive or have low balances aren’t paying for insurance they don’t need. Want the full lowdown on the latest super news? Jump over here!

Don’t delay – seek advice now

If you have an illness or injury that prevents you from working, you might be worrying about how you are going to pay your bills and put food on the table. You could be entitled to receive a TPD lump sum, as well as other insurance benefits.  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.

Free advice and no upfront fees

Not only do we offer a FREE claims check – we handle most insurance claims on a no win, no fee basis. Our Head of TPD and General Insurance, Rowan McDonald, is an insurance law expert. If you think you might have a claim, get in touch with Rowan and his team for high quality legal advice.

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