Super mistake in disinterest

The disappointing outcome of the Super mistake in disinterest in this asset is avoidable. We urge attention to your Super on a regular basis.

One of the most forward-thinking financial reforms of the last century was the establishment of the compulsory superannuation regime.  Under this regime, the most significant financial asset most Australians will accumulate during their working life, is their superannuation account.  The unfortunate accompanying disservice was the creation of default superannuation structures. These structures place the obligation for investing the accumulating wealth in the hands of trustees.  Consequently, the account holders have come to take little interest in their investment.

This article deals with some matters that you should be on the lookout for when your annual member statement is received.  It also deals with why an active relationship with a financial adviser in this space will benefit you.

Disinterest – a Super mistake

Disinterest in superannuation account performance and strategic management of its opportunities is a Super mistake.  Superannuation is at the one time, a tax-effective investment platform; and a medium- to long-term investment vehicle.  Advised investors undertake higher investment risk whenable to apply longer investment terms.

The key matters for consideration in your superannuation account, are –

• The level of contributions made each year (and their frequency of crediting);

• The investment portfolio structure (reflecting your investor risk profile, your financial goals for retirement, and the term until you can access these funds);

• The performance of the investment strategy employed (net of the fees incurred to implement that strategy); and

• Regular review of the contributions and the investment strategy for relevance to your personal financial needs and circumstances.

Annual member statement 

Your fund emails or posts your obligatory member statement to you within a few months of the close of each financial year.

Some of the features that will appear on most superannuation fund annual member statements are –

• Account Balances:

  Opening and Closing balances specifically.  (Consider the impact between the two of  –

• contributions made;
• investment earnings;
• expenses paid; such as
  • trustee administration costs,
  • insurance premiums, and
  • investment manager costs;
• failure of employers to contribute in time, delaying investment opportunity; and
• inappropriate investment strategy will impact the earnings of the investment.

• Fees and Charges:

  This is an area in which not all superannuation trustees are as transparent.  Some don’t detail investment manager costs for instance; and some may charge a fee for making an investment ‘switch’.  In ‘comparing the pair’ (your fund against the ‘average’ fund), remember that levels of service and personal relevance vary dramatically.  Consult with a financial adviser if you find the level of these costs burdensome and/ or confusing.

• Insurance cover:

  This is a very little understood element in superannuation accounts, particularly when default insurance cover is provided.  In broad terms, there are three types of insurance that a superannuation trustee must consider for members under their ‘care’.  They are

• • Life (Death) Insurance. The Trustee receives the death benefit on death of the member,

• • Total and Permanent Disability Insurance. The Trustee receives the claim benefit as owner of the policy.  The Trustee submits the claim after a prolonged period of incapacity of the member.  They pass the appropriate benefit on to the member in compliance with SIS legislation and the terms of the policy.

• • Salary Continuance (Income Protection) Insurance. The benefit is paid for a period of temporary disablement.  Payment passes through the Trustee to the member if the provisions of the Superannuation Industry Supervision Legislation are met.

• Transaction Details:

  Some superannuation trustees include itemised transaction information with their annual member statements.  Others make this information available on the member’s portal on their website.  It is important to ensure that your employer’s contributions, and your personal ones, are received on time, and receipted promptly.  Any questions or concerns in this regard should be relayed to your financial adviser, or to the Trustee directly.

• Beneficiary Nomination:

  this is another of those little understood areas of superannuation.  Do you know where or to whom you superannuation death benefits will be paid?  This can be a tricky area of superannuation and testamentary law.  You can influence the decision, or indeed bind the Trustee to pay in a particular way.  This can be achieved with lodgement to the Trustee of a valid beneficiary  nomination – either a discretionary, or a binding nomination.

Your intentions should be influenced by the prospective tax consequences of your nomination, especially if your Estate Plan is seeking to provide a level of equality.  

How to manage your Super to avoid mistakes 

Apart from doing as much research as you can on the various matters that are at play in your financial world – seek advice.  Advice from a qualified, experienced professional adviser such as our team at Continuum Financial Planners Pty Ltd, will help keep your mind at ease and guide you toward achieving your goals. To arrange an appointment with one of our team –

• phone our office on 07-3421 3456, or
• at your convenience, use the linked Book A Meeting facility.

(This article was posted by us in August 2024.  We occasionally refresh/ update it, most recently in July 2025.)