Superannuation is subject to an ever-changing economic and legislative environment which means that it is increasingly important to actively monitor your superannuation and Government announcements on the management of it.
Is your employer paying your super?
The current Government is seeking to remove the legal requirements of employers to inform employees of their superannuation payments by noting them on their payslips. What does this mean for employees? You will no longer be able to see how much you are paying in super each pay day, and you have no visible guarantee that your superannuation payment has indeed been made. A recent report has estimated that up to $2.5 billion in compulsory super is not being paid by employers annually.
Another consideration is the number of superannuation accounts. The previous Government in their MySuper changes increased the fees on accounts with smaller balances. What this means, is that if you have a number of accounts from a string of different jobs, than you may losing too much of your super in fees.
How do we as employees keep a check on these issues? By closely monitoring your superannuation and making sure your employer is making the compulsory contributions at the required level and ensuring your voluntary salary sacrifice contributions are also correct an up to date. Consolidating your superannuation into one account is also a good idea to reduce the amount of fees. One factor that might influence your chosen fund is the availability of information to allow for you to monitor your contributions. One tip would be to choose a fund with fast online access to your account.
Be aware & informed.
An online account will allow you to see what money has come into your account and when. The legal requirement on employers is that payment is to be made only on a quarterly basis and no later than 28 days after the end of the quarter. However there is no protection in compulsory payments to ensure the required payments are made. As a result of this many employees, particularly in struggling businesses, are among those owed $2.5 billion of compulsory super not paid each year. The process via the ATO can be arduous and raise discomfort within the workplace when you are seen to be challenging your employer. So it is clear that the earlier issues are picked up, the easier they can be to resolve.
The best option is to check regularly to ensure your super is being paid correctly and on time. An online account allows you to do this in the comfort of your own home and is another reason to consolidate your accounts if you have a few.
There are five things you can do now.
- 1 – Find out whether your current fund provides online access to your account. Are there any reasons why you might be unsure that your employer is making the required payments? If not, is there another fund you can move to?
- 2 – Use the Find My Super resource to identify any accounts you may not be aware of, or have forgotten.
- 3 – Look into the benefits of each of your funds (if you have more than one) and see whether the additional fees you are paying outweigh the benefits of having more than one account. Make sure you consider your insurance needs before you transfer any fund as you may lose valuable cover.
- 4 – If there is no benefit to having more than one, consolidate into your chosen fund (hopefully with online access to your account)
- 5 – Seek advice on all of the above from a credible Financial Planner or Accountant such as Insight Wealth & Accounting Advice.
We hope you find this information helpful in ensuring your superannuation is all it can be for when you need it most. If you want to discuss your personal situation, please get in contact on 02 4941 1888 or on our website with us to make an appointment, we are only too happy to help.