As tempting as it might be, ignoring your superannuation is never a good idea. After all, it is probably your current biggest asset.
Since retirement is still far in the future, you might want to adopt a set-and-forget approach, leaving it unchecked until retirement. The problem is that by then, it could be too late.
Why is this the case? Well, what you might not realise is that if super payments have been missed or you have been underpaid, it is almost impossible to fix retroactively.
Even if retirement isn’t something you’ll have to worry about for years, it’s still a good shout to regularly review and get on top of your super before things can spiral.
The tax office recommends you check your superannuation every year - and that while you’re doing your tax return, it’s worth checking in on your super as well.
Not sure where to start with checking on your super? Here are 12 details we think are worth a look:
1. Confirm your personal details
First things first: does your super fund have your correct name, date of birth, contact details such as phone number, email and postal address?
Remember: if you’ve moved for uni, or you’re out of home for the first time, you might have forgotten to update your address for your super. This is a good time for you to check in and make sure everything is correct!
To pay the correct rate of tax on your contributions and earnings, the super fund needs your tax file number too- otherwise, it will charge you too much tax.
2. Check the balance and contributions
What if your employer isn't paying your superannuation or it isn't the right amount? If you’re wondering what “the right amount” looks like, that should be 11.5% of your pay.
Some $4.7 billion of superannuation goes unpaid every year, either by negligent employers or by error, according to research by Industry Super Australia. If you check your super and things seem off, there are some steps you can take to make things right with your employer.
Uni is a busy time, and your super might have slipped your mind, but don’t stress- superannuation apps and online services help make it easy to check your super payments and balance regularly.
3. Make sure all your super is there
The tax office has an 'estimate my super' tool, and the regulator's moneysmart website has an 'employer contributions calculator' to help you work out how much super guarantee (SG) you should be getting.
These will also be able to tell you the four dates a year that your employer must legally pay the SG, so you’ll be able to tell if something weird is going on.
Good to know - the SG rose on July 1, 2024, from 11% to 11.5%. The super guarantee will increase by a further 0.5% on July 1, 2025. Be sure to check your super to make sure you're receiving these increases!
4. Check the fund
With superannuation fund mergers, your super fund could have a different name than before. If you don’t recognise the name on the statement, double-check with your fund itself to see if there’s been a merge you’re not aware of!
5. Make sure your personal contributions are there too
Don’t just look for what’s come out of your pay- make sure your fund has any additional contributions that you have contributed either through salary sacrificing or direct payments.
6. Look for any unclaimed super
Think back over the past year. If you’ve changed your job, your name, or your address, you could have stranded or lost super accounts.
Your lost super may be held by your super fund if it is inactive and under $6000, as well as a few other reasons by the tax office. Go to the tax office via my.gov.au (or by using the myGov app) and link your myGov account to the ATO.
After you’ve done that, select ‘super’. This will show you the details of all your super accounts, including any lost or forgotten ones. It will show whether the tax office is holding any super for you. This will allow you to consolidate your super into one account, too.
Consolidating your super funds may reduce fees and make it easier to manage. In some cases, it may make sense to have more than one fund; they might have different features that you want to access.
While you’re there, it’s worth checking that the tax office has your correct name, contact number, email, address, bank details and tax file number. This will help prevent any lost super in the future, and it will match any super with those details to you.
7. Check if your nominated beneficiary is up to date
If you’ve been paying attention, you’ll remember from last time: your nominated beneficiary is the person who will receive your superannuation if you were to die (worst case scenario!). Is yours the right person?
To make things more complicated, there are 'binding' and 'non-binding' beneficiaries, depending on the rules of your super fund. The binding nomination means your super fund is formally obligated to pay your selected person if you were to die. This form is typically valid for only three years, so make sure yours is up to date. On the other hand, non-binding is not formally binding and only acts as a guide for the superannuation trustee on how to pay out your death benefit.
This might not be an issue now, but good to keep in mind- your circumstances change with marriage, divorce and having children so you may need to update your beneficiaries in future by contacting your super fund.
8. Check on your Life and Total and Permanent Disability (TPD) insurance
Most Australians hold their life and TPD insurance through their superannuation fund. The automatic cover is only a basic amount, but your annual statement will show how much you actually have banked up.
Give it a look- you may need to increase your cover and buy more insurance as your life changes, particularly if you have dependents and a mortgage. Don’t worry, it is easy to do this, and the premiums come out of your super fund rather than paying out of pocket.
9. Consider if you want income protection insurance
Good news! Some funds may offer income protection insurance to cover you if you become ill or injured and can't work. If this was to happen, you would receive monthly payments to support you while you're not earning your regular salary.
10. Look at the long-term performance
It’s interesting to see how your super fund performed over the last year. How much did your balance increase by?
Because super is a long-term investment, don’t just consider the short-term performance, which could be hit periodically by weak share or property markets, and focus on the long-term performance. No need to jump funds based solely on short-term performance!
AustralianSuper's balanced investment option estimates there could be five negative returns every 20 years or one every four years. But in the long term, the risk level for a 20-year period is low.
Before panicking over what appears to be a poor return for your fund make sure you compare it to similar funds over the same period and read your fund’s explanation of the result. In terms of super funds, past performance is a poor guide to the future unless you can attribute it to a persistent characteristic of the fund, such as overly aggressive investment tactics, or excessive allocation to unlisted assets.
11. Check if your super is hitting your retirement goals
Even if retirement is way off, or you’re still figuring out what life after uni will look like for you, take a glance at how much money you will need for retirement.
Not sure where to start? Fire up that moneysmart superannuation calculator we linked earlier to see if you’re on track and, if not, how you can get there.
12. Make sure you're not in a mid fund
In the case that your super fund is flopping when compared to other funds, you don't want to be in a continually poor-performing fund or paying above-average fees, as it really lowers your retirement savings.
Not sure how to check how your fund stacks up against other superannuation funds? Look at APRA's annual performance test, which highlights poor performers and high fees. If you are in a MySuper fund, you can also check your fund's performance using the ATO's YourSuper comparison tool.
There are super comparison websites offered by private companies, so check the product disclosure statements for each fund as well.
