How to choose a super fund
Did you know that both returns and fees can have a big impact on your super? We take you through some other things to consider when choosing a super fund.
Checking your super
When you check-in on your super, you might generally do a quick scan to make sure money is going in from your job, and that you’re getting good investment returns.
But most of us probably don’t check what else we’re getting from our super fund, or the other things they do to help our super grow.
It might surprise you to know that investment returns are not the only thing that impacts your balance.
All super funds charge fees. They cover the cost of running the super fund and managing your investments. We’re a low-fee Industry SuperFund run only to benefit members.
If you’re comparing super funds, it’s important to look at fees too as they can also have a big impact on your balance.
LUCRF Super members with a balance of $50,000, pay a low $497 per year, compared to $803 per year for the average retail super fund member.
|TOTAL FEES FOR AN ACCUMULATION BALANCED OPTION PER YEAR 1|
(BASED ON A $50,000 ACCOUNT BALANCE)
|LUCRF SUPER BALANCED OPTION||AVERAGE INDUSTRY SUPER FUND BALANCED OPTION||AVERAGE RETAIL SUPER FUND BALANCED OPTION|
|The LUCRF Super Balanced option is $497 (gross of tax) over a one-year period which reduces to $443 (net of tax).|
We understand it can take time to grow your balance. Especially when you’re starting out in the workforce or you’ve only recently moved to Australia. That’s why we have a 3% total fee cap for members with a balance below $6,000. We also have one of the best variable administration fee caps of $495 per year regardless of your balance
Insurance that’s right for you
Most super funds also offer insurance for their members. Our insurance can be affordable, flexible and designed to offer you and your loved ones protection if the unexpected happens. Insurance premiums are deducted from your super account each quarter, so you don’t have to think about budgeting for them or paying out of your own pocket.
When looking at and comparing your insurance cover you should look at several things.
- What type of insurance cover do you have?
- How much cover do you have?
- How much are your premiums for the cover?
- What are the terms and conditions of the cover that's provided?
It might also be a good idea to think about your age and life stage. Our default insurance is designed with this in mind. For example, if you are under 30 you’re likely to need less insurance as you may have less financial commitments, such as a mortgage,. Therefore you require a lower level of cover. Lower cover means lower premiums and your super balance not being eaten away at unnecessarily.
If you’re aged between 30-40, you are automatically given the highest level of cover to protect you for larger financial commitments, such as a mortgage and children. This means premiums are more expensive. Once you are over 40, the level of cover begins to gradually reduce as financial needs usually decrease over time.
Below is an example of a male with Death & TPD (type of insurance cover) for the default amount of cover at various ages and how much he pays for that (the premiums) compared to the premium cost range across all major super funds.
|Occupational category||Light Blue|
|Amount of default cover||$50,000||$115,000||$94,000||$29,000||$12,000|
|LUCRF Super Premium||$89 p.a.||$206 p.a.||$263 p.a.||$263 p.a.||$263 p.a.|
|Premium cost range (all Funds) 1||Up to $210 p.a.||Up to $562 p.a.||Up to $437 p.a.||Up to $460 p.a.||Up to|
1 Including Industry, Retail, Corporate and Government
Source: SuperRatings SMART April 2021
It's important to understand how insurance in super works when choosing a super fund as you may benefit from being covered for your specific type of work, working conditions and circumstances.
Our insurance cover is tailored specifically to our members and the work they do. That’s why by default insurance is under the ‘light blue’ occupational category. Although we also offer ‘white collar’ and ‘professional’ occupations. We also provide cover conditions for members who work full-time, part-time, and casual.
To learn more about insurance in super, including default cover and what types we offer, visit our How insurance in super works page.
Professional advice and support
Your super fund should be able to provide you with the advice, help and guidance you need.
Our experienced financial advisers can help you make decisions about your future by taking the time to understand who you are. Or if you’re after helpful support and education in the workplace you can book an online appointment with a super specialist.
Whatever you need we can help you through our online tools, face to face or over the phone.
Long-term investment performance
Super is a long-term investment and we’re proud that our average performance over the last 40 years shows solid long-term success.
When you join us, you’re automatically invested in the MySuper Balanced option. The table below shows how it’s performed since inception and FYTD.
|investment option||Last fy to 30 June 2021||since inception TO 30 JUNE 2021|
|MySuper Balanced (default)||18.66%||9.65%|
While the MySuper Balanced option is designed to suit most our members, you may decide to choose another option based on your appetite for risk. This is dependent on factors such as:
- your age
- your investment time frame (how long until you can access your super)
- where other parts of your wealth are investment
- your investment risk tolerance
We have another 10 investment options to choose from.
View investment performance for all time periods and investment options.
The whole picture
The important thing to remember when choosing a super fund is that while investment returns form an important part of your outcome you should consider the whole picture. Fees, your insurance cover and the level of care you feel you receive all impact your super.
Want to check in on your super?
Speak to one of our super specialists who can help get your super in shape.Make an online appointment