6 steps to reviewing a super statement

6 steps to reviewing a super statement

Once a year you receive an annual statement from your super fund. While it might be tempting to just file it away, paying close attention to the contents of your super statement can be an important exercise.

Here are our top tips on what to review when your statement comes your way, this month or next.

1. Review your asset allocation (and underlying investments)

One of the most important things you can do for your super is to make sure it’s invested appropriately for you. When you receive your annual super statement, review how much of your super is invested in each type of asset class (and sub-asset class) and consider whether this still makes sense for you and your risk profile. As a reminder, your risk profile is generally based on your:

  • financial situation, goals and objectives
  • desire to align your investment values with your personal values
  • expected investment performance, time horizon, and tolerance/capacity for risk
  • understanding of investment fundamentals (eg risk/return, asset classes and diversification).

Your investment choice isn’t a set-and-forget decision. For example, the level of risk that may have suited you in the past, may no longer be appropriate for you today. As such, an annual sense-check can often be a good idea.

2. Assess the performance of your super

Just as you would any other investment, it’s important to keep a close eye on the performance of your super (ie your investments inside super). Doing this can help you stay on track with your goals and put you in a better position to make comparisons with other investment options and super funds.

When reviewing performance, pay attention to each investment option and your specific rate of return (the weighted rate of return for all investment options selected) over a given period.

You might find the ATO’s YourSuper comparison tool useful for comparing performance with other options and super funds, but bear in mind that past performance shouldn’t be used as a measure for future performance—and a fair comparison should ideally be ‘apples with apples’.

3. Reflect on your contributions history

Review the different types of contributions that were paid into your super over the course of the financial year. This may include concessional contributions (such as employer contributions, salary sacrifice, and personal deductible contributions) and any non-concessional contributions you may have made.

Did you contribute more or less in previous financial years? Were there other contributions you could have made to make the most of the available contribution limits and boost your super savings for retirement? Reflecting on these questions could highlight some new opportunities for the present financial year and future ones (including, if applicable, the Government co-contribution as an example).

4. Review your super beneficiary nomination

Your beneficiary nomination may ultimately decide who will receive your super benefits when you pass away. Family circumstances change, so reviewing this annually to make sure your nomination remains up to date and valid, can be a good idea.

Also remember to review the type of nomination you have made. For example, a binding nomination is bound by law, and is generally valid for a maximum of three years—after this point, it can lapse and be deemed no longer valid. In comparison, a non-binding nomination isn’t legally binding on your super trustee, and how your super benefits are distributed will ultimately be down to their discretion. This is also the case if you haven’t yet made a beneficiary nomination.

5. Check the type and level of insurance cover you have

Small, incremental changes to your circumstances over time can make a big difference to the type and level of cover you may need. It’s therefore a good idea to review your insurance cover annually, or when a major life event happens—such as buying a home or starting a family.

As well as reviewing the type of cover you have (eg life, total and permanent disability, and/or income protection), also review the level of cover you have, and the features that come with your policy. Making sure these are appropriate for your personal circumstances and needs can help to reduce the risk of being under-insured.

6. Review the fees you are currently paying

The fees you pay within super can have a big impact on your account balance and your ability to grow your wealth. Putting your fees under the lens can be important in terms of ensuring they are competitive, and not costing you more than they need to.

With this in mind, consider reviewing every type of fee that you are charged, including member fees, admin fees, investment management fees, contribution fees, adviser service fees, and your insurance premiums. Together, these fees quickly add up, so it’s important to assess whether they reflect the value and services you receive from your super fund. 

If you would like to discuss your annual super statement with us, please get in touch.

This Knowledge Centre provides general educational information only. The content does not take into account your personal objectives, financial situation or needs. You should consider taking financial advice tailored to your personal circumstances. McLauchlan Wealth has representatives that are authorised to provide personal financial advice. Please see our website https://mwealth.com.au or call (07) 5539 9095 for more information on our available services.