Getting to know your super fund and what it can do for you

Super is not something that is taught at school or discussed around the kitchen table, so understanding how super works and how to make the most of it can be a steep learning curve.

The learning starts with choice of fund and investment options, reaches a climax when you are planning for retirement and continues as you manage your retirement income and estate planning.

As the super industry matures, member education is an area where the best funds can differentiate themselves from the rest. Education is being delivered via online articles, podcasts, videos and webinars as well as face-to-face seminars around the country.

For example, UniSuper covers all bases on a wide range of topics, from retirement planning, contribution strategies and market outlook to aged care, insurance and estate planning, super for women and psychological advice on retiring well.

Calculators and other tools can also help your retirement planning. For example, ESSSuper has calculators to work out how much super you are likely to have on retirement, the impact of extra contributions and salary sacrifice, the cost of insurance and an investment risk profiler.

Advice

After seeking out information and educational material, people often want more personal advice to help them grow their super and manage the transition to pension phase.

Super funds are catching on, and many are beginning to improve their advice offerings as a way of retaining members.

Advice is offered on a scaled basis, beginning with simple advice over the phone about your account, the range of investment options it offers, contribution strategies, how to choose the most appropriate insurance cover and nominating beneficiaries.

At the top of the scale, some funds offer access to comprehensive financial advice from licenced financial planners on a fee-for-service basis.

Some funds, such as UniSuper have in-house teams of advisers available for face-to-face appointments. Others, such as Cbus outsource to an approved certified financial planner in your area.

In some cases, the fee for advice may be deductible from your super account balance.

For more on the range of advice services being offered and the costs, see SuperGuide article: How to find low cost (or free) financial advice.

Insurance

One of the most valuable benefits of super aside from retirement savings is access to life insurance at cheaper rates than you could negotiate yourself outside super.

Members are generally offered default death, TPD (total and permanent disability) and income protection insurance through their super. If you are a personal member you can apply for cover.

For more details on how insurance in super works, see the SuperGuide article: Insurance inside super: a definitive guide.

Insurance is difficult to assess compared with things such as investment performance, because it’s so complex. Premiums differ according to your age, gender, occupation and smoking status. There can also be big differences in policy conditions and benefit design.

To get an idea of the best in show, Chant West has a category for insurance in its annual super fund awards.

The 2019 winner for best insurance offering was industry fund NGS Super. It’s insurance offering through TAL Life was recognised for the overall quality of its products including policy conditions, benefit design and member experience.

NGS offers default cover that changes over time. Starting low at just cents per week for members in their 20s to their mid-30s, premiums gradually increase with age. It’s also worked hard to improve its phone claims experience.

The difficulties many people faced when trying to make insurance claims came under the spotlight during the banking royal commission. It’s not easy to know in advance how your fund will respond to a claim you may need to make in future. But you can get an idea of how your fund’s insurance offering compares with others by using Chant West’s comparison tool AppleCheck.

Speaking your language

Super funds know they need to lift their game when it comes to communicating with members. Generally, Australia’s super funds have a good story to tell but they have not been so good at spreading the word and engaging members in their financial future.

Traditionally, the fund’s website has been the first point of contact, with details of how to get in touch via phone, online chat and email. You can also download forms, annual reports and other information or request a printed copy.

These options may be enough for some members but, as the Investment Trends survey highlighted, others want to access their super through a mobile device. Banks have been doing this for some time, now it’s the turn of super funds to play catch-up.

That’s the reason behind the sudden flurry of downloadable apps.

For example, SunSuper’s app lets members view their account balance, transactions and personal details, switch investment options and nominate beneficiaries. They can also use the app when changing jobs to email their new employer with their super details.

Rewards and other benefits

Some funds are also getting into the rewards game to attract and engage members.

SunSuper’s Dream Rewards program offers discounts on scores of products and services from their rewards partners. These are similar to the rewards you might find on offer from insurance companies, credit card providers or your union if you belong to one.

A rewards program is not reason enough to choose a fund, but it’s an added perk some members may find valuable. And if it gets people to check their account more often, that’s not a bad thing.