Need to know
- The Australian Taxation Office (ATO) will release the second round of super fund comparison tool results on 31 August
- The tool makes it easy to compare fees and performance across funds
- Super Consumers Australia says the tool will help Australians make better decisions about their retirement savings
Comparing superannuation funds to find the best one for you can be complex and confusing.
The government's free and independent super fund comparison tool will help. It tells you the fees you pay, how much the fund has returned to its members and how it compares to other funds.
In August 2021, it added the results of the first basic performance test, which show whether each fund passed or failed. From 31 August 2022, the tool will display the second round of annual test results.
A personalised look at how your fund is doing
There are two ways you can use the tool – you can either use it to compare funds generally or you can use a more personalised version to see how your fund stacks up once your age and super balance are factored in.
The personalised version is more useful for working out the right fund for your specific needs.
To log in to this version, follow the instructions under the 'personalised version' heading or click 'YourSuper comparison tool' and then 'Login with myGov'
The tool currently includes all the MySuper products. These are typically cheaper, simple products designed to suit most people
Note that the 'reported super balance' the tool shows will likely be out of date – check with your fund for an up-to-date figure.
The tool currently includes all the MySuper products. These are typically cheaper, simple products designed to suit most people. You can either choose to join one of these products or you can be defaulted into one of them if you don't make a choice. If you're not sure what super accounts you have, you can check through MyGov.
The government has paused plans to add choice products (those are the funds you have to actively choose to join). Super Consumers Australia is advocating for choice products to be added to the fund comparison tool so more Australians can see how their fund stacks up.
Is your fund doing a good job managing your savings?
The new round of results will make it easy to see how a fund has performed over eight years.
The performance of your super fund can have a massive impact on your retirement income. For example, the Productivity Commission found the difference in savings between a typical full-time worker in a bottom-quartile fund and one in a top-quartile fund would be a staggering $660,000.
Another way to look at this difference is that it adds up to 13 years of lost pay.
On 31 August, the YourSuper comparison tool will also show the second round of annual test results, revealing whether your fund passed or failed a kind of 'basic fitness test' for managing your money. You can view the result in the 'investment performance' column.
Fees matter
It's easy to overlook fees, but even apparently minor differences in fees can add up over the years and have an outsized impact on your retirement income.
The Productivity Commission found an increase of just 0.5 percentage points could cost a full-time worker around $100,000 by the time they reach retirement.
The fees your super fund charges will be based on your balance and, in some cases, your age.
By entering your account balance (sourced from your fund) into the tool, you can more easily compare the annual fees in dollars you would be charged by each fund. Remember to source your balance from your fund as the MyGov number will likely be out of date.
Getting the most out of the tool
Tools like this can help you avoid the high-fee funds that have delivered poor returns to customers over a long period of time.
"Its real benefit is highlighting those who passed their basic fitness test," says Super Consumers Australia director, Xavier O'Halloran of the tool.
Its real benefit is highlighting those who passed their basic fitness test
Xavier O'Halloran, director of Super Consumers Australia
In the first year, 13 funds failed the performance test.
See our guide on comparing super funds for more information.
Don't forget the about insurance in your super
It's also worth making sure the insurance in your super fund suits your needs. These needs may change over your working life as more (or less) people become financially dependent on you. To find out what your insurance will actually cover, contact your fund.
If you decide you don't need cover and want to cancel it, remember that it can be harder to get this cover back. You might have to go through an underwriting process (which may include medical tests) before the fund offers you insurance.
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Instead we're funded by members who value expert reviews and independent product testing.
With no self-interest behind our advice, you don't just buy smarter, you get the answers that you need.
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This content was produced by Super Consumers Australia which is an independent, nonprofit consumer organisation partnering with CHOICE to advance and protect the interests of people in the Australian superannuation system.
Stock images: Getty, unless otherwise stated.
