I received a surprise in the mail the other day from my superfund….

Real Wealth Opinion

Posted on October 5th, 2016 at 9:21 AM by David Orth

I received a surprise in the mail the other day from my superfund – an annual statement. This was a surprise as I didn’t know it existed. As many of the working population can appreciate, if you’ve had multiple jobs over a period of years then you will probably have multiple superfund accounts.

What caught my attention were the balances. My account apparently went from $685.21 to $486.97 in the past financial year (June 30 2015 to June 30 2016). Detailed on the statement were the investment earnings (+$13.19), contributions ($0), fees (-$78.54) and insurances (-$170.20).

In other words, for my superfund to make any money, investment returns for the 2015/2016 financial year would have to be 36% or above to break even. Considering the best return this particular fund had ever achieved in a single year is just above 10%, there is almost 0% chance for this account to ever make money.

Before I go any further, yes this is ultimately my fault, I didn’t contribute to it nor did I even know of its existence – legally, I cannot blame anyone but myself.

But (there’s always a but!) these superfunds claim on their websites:

  • "Our members are the centre of everything we do", and;
  • "We strive to do the best for our members", and;
  • "helping our customers take control of their financial future" and;
  • "We put members first".

Basically, they’re continually investing accounts even though the chance of it making money is in the vicinity of less than 0.01% - does this sound like they’ve got my interests at heart - or their own?

How many other Australians out there have accounts in similar circumstances to mine I wonder. If I’ve given them over $248 in free money in 2015, how many other (particularly younger part-time workers) have had the same happen to them?

Superfunds are happy to advertise how they’ve got your interests before theirs, but this isn’t the case. In-fact, as clearly evidenced, they’ll willingly take the last of your super and invest it without a hope of ever actually making money.

The good news is that the rules are changing. Superfunds are now required to hand over accounts that are not being contributed to. The market is about to become super-competitive as this free ride eventually stops and the public become more and more aware that there are alternatives.

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