Australians are missing out on hundreds of thousands of dollars in superannuation – with more than five million people being ripped off, according to a finance expert.
Money magazine editor Effie Zahos said choosing a profitable superannuation fund is like ‘picking the winning lottery ticket’.
‘There’s so much choice and people do get confused and they go with whoever their employer has got – we’ve got choice,’ she told the Today show.
Money magazine editor Effie Zahos said chosing a profitable superannuation fund is like ‘picking the winning lottery ticket’
‘Your employer may pick a fund simply because they’ve got a big bank in their ear or a life company talking to them.’
She said it was important to take into account your stage in life when choosing a superannuation fund.
‘There are three factors that affect your super: the performance of the fund, the fees and the cost of your insurance – so when you’re 20, it’s very different insurance needs to when you are 60.
‘When you’re 20, you probably don’t have a lot of debt, and you’re probably more concerned about disability insurance than death cover.’
Ms Zahos said dud funds were likely to have large exit fees for leaving their plans.
‘Don’t be complacent with your super, as you move through life,’ she said.
‘Watch your insurance, because if you’ve got a pre-condition and you leave that fund you may find you’re not getting as lucrative an insurance cover.
‘You should talk to your super fund, or talk to someone you trust to get some advice.’
The analysis comes as the Productivity Commission proposed a list of the top ten standout super funds to be made available to Australian workers.
Choosing the right super fund could net employees an extra $375,000 by the time they retire.
The Productivity Commission is looking at a ‘best in show’ model to guide workers when selecting their preferred super provider.
The analysis comes as the Productivity Commission proposed a list of the top ten standout super funds to be made available to Australian workers
‘At the heart of our preferred model is a single shortlist of ‘best in show’ products for all members,’ the Commission’s draft report said.
‘Members should be empowered to choose their own product, and the shortlist should be designed to make this safe and easy to do.’
The list of the top 10 super funds as chosen by industry experts include Australian Super, First State Super, Hesta, Rest and CareSuper.