Superannuation for education staff – get informed
Rule changes mean employees need to get up to speed with fees and how their super fund is performing.
Employers are being urged by super funds to help you understand your right to choose a super fund. So, get wise yourself!
The NGS Choose to Chat promotion offers employers a toolkit which outlines “why, when, where, and how to help your staff improve their financial wellbeing”.
NGS wants your bosses to provide you with more financial advice, particularly about superannuation.
NGS Super CEO, Laura Wright, says employers who to talk to new and existing staff to help them feel confident about their financial future see benefits in the workplace.
“Financial worries and stress can impact productivity and performance at work. Helping your staff improve their financial wellbeing can have a positive impact on employee engagement and general wellbeing, which is a win-win for everyone.”
She says such discussions help organisations with attracting and retaining staff.
But there is plenty of information out there to help you make good choices. Your boss doesn’t have to be your first point of call regarding superannuation.
Legislative changes that came into effect in November 2021 mean employees are now linked to a super account throughout their career if they do not actively choose one – making decisions about super are more important than ever.
Decisions that teachers and education workers make about their superannuation now can have long-term consequences directly affecting their retirement nest egg and when they are comfortable enough to retire.
Super and you
Education staff, like all Australian workers, must keep in mind two important factors in regard to their superannuation.
1. Fees
Super fees add up. As the ABC explained, if you've got $100,000 in a superannuation fund and the fee is one per cent — that's not a one-off $1,000 payment.
“It is 1 per cent of your total assets in fees, each and every year. As your account balance grows from contributions and investment earnings, so do your fees.
“Even in bad years when negative investment returns mean your account balance goes backwards, you could still be paying over $1,000 a year in fees.”
Super Consumers Australia director Xavier O'Halloran says superannuation is not “in your face” so we often lose track of how much it costs.
"And a lot of people miss out and don't realise that they've paid quite high fees each year in superannuation."
Consumers paying more than one per cent average fee “should shop around and look at the returns and the performance over the long term”.
"Even if you're getting charged low fees, returns over the long term are going to be the really important factor," he says.
"Around tax time is a good time to check to see what you're paying, where your superannuation is, what types of returns it's delivering over the long term, and what kind of risk they're exposing you to for those types of returns."
moneysmart.gov.au advice on choosing a super fund
2. Performance
The ABC analysis concluded that industry super funds generally performed best in 2021.
Executive director of research firm Rainmaker Information, Alex Dunnin, says switching from an underperforming fund is easy and funds “can no longer charge thousands of dollars when consumers want to exit a fund”.
"You can just go to any super fund, click on the website and say, 'I want to join your fund'. And that fund will then do the administration work for you."
He says returns matter just as much as low fees.
Super funds now forced to reveal their performance and exits from the industry expected as competition heats up and funds merge.
It’s great if your boss helps inform you, but it’s your money, and the information is at your fingertips now.
Go online and check your fees, charges, and balances.
Your money, your choice.