I’m frustrated with our current super fund and want to switch providers, but I’m not a super expert. What features should I look for in a new fund?
I’m frustrated with our current super fund and want to switch providers, but I’m not a super expert. What features should I look for in a new fund?
– Befuddled employee in sales, Sydney
Many employers see super as a bit of a minefield. There is complicated legislation and paperwork to navigate, not to mention the need to ensure your employees don’t end up in a dud fund. As a result, super remains a low priority in many HR departments and many companies are stuck with under-performing super funds.
The good news is that switching funds no longer has to be a migraine inducing exercise. When considering a new super fund, you should review all the fees and charges. Fees can have a huge impact on performance, but often you need to be a professional archaeologist to dig up all of the fees charged by the big super funds.
The new breed of super providers is changing all this. These funds offer transparent annual fees without rip-offs like additional entry, exit, switching and contribution fees. Demonstrable performance is another key factor, but picking a fund based on returns can be incredibly hard. It’s very hard for active fund managers to consistently outperform the index.
It’s important for your employees that the new fund has clearly explained investment options. Staff shouldn’t have to wade through pages of gobbledygook to understand the different investment styles available to them.
Also make sure you select a fund with the flexibility to tailor insurance benefits to meet the needs of employees. Many funds offer automatic insurance cover that eliminates the need for staff to provide medical evidence.
Last but not least, make your own life easier by choosing a fund that streamlines the administration process. Online administration provides a hassle free way to make contributions, manage member changes and access fund information. Some funds also offer free clearing gateways to let employers administer payments to different employee super funds.
Choosing a great value super fund with clear communications and good customer service will not only benefit you, it will help give your employees a lasting legacy for a comfortable retirement.
By Tony MacRae, director, Virgin Super for Business. www.virginmoney.com.au
