The basics
You're likely to be eligible for choice of fund if you're employed in the
private sector unless you're employed under a State award, certified agreement
or workplace agreement that specifies the fund to be used.
You'll know if you are eligible if your employer notifies you and
provides you with a standard choice form to complete. If you think
you may be eligible but you're not given a form, check with your
employer.
So if you are given a choice form to complete, what should you do? By
all means have a look at alternatives, but as an Asset Super member
you'll probably conclude that the fund you're in now is a good one
so there's no reason to change.
If you're happy to stay with Asset Super and your employer has chosen
Asset as its default fund, do nothing. You don't have to complete
the form unless you want to change. Just say:
"I'm right, thanks. I'm with Asset Super."
If the default fund shown on the form is not Asset Super, then complete
the form and show 'Asset Super' as your chosen fund.
If you do want to consider a different fund, first check that it's an
eligible choice fund. The fund or its representative should be able
to tell you that. You'll need to complete the application form for
that fund, then complete the choice form and return it to your
employer. The fund you nominate becomes your chosen fund 2 months
from the date your employer receives your completed form (or earlier
if your employer decides).
But before you decide to change, we suggest you read the following Tips
and Traps.
The tips and the traps
Tip: Don't confuse choice of fund with choice of investment. With Asset
Super you already have choice of investment, because there are 10
different options you can choose from.
Trap: Insurance protection is important for most people. Before you
think about moving to a different fund, check that you can get the
insurance cover you need and that the premiums are reasonable. With
some funds, you may need to provide written medical evidence or even
undergo a physical health examination to qualify for insurance
cover.
Tip: It's up to employers to work out who is offered choice and who is
not, according to the Government's rules. If you think you should be
eligible but don't receive a choice form from your employer, ask
them about it.
Trap: Think beyond your current job. Before you move to another fund,
check what would happen if you changed jobs. Would you be able to
stay in the fund? And what about the fees? Many funds (unlike Asset)
have higher fees once you change from being an employee member to a
personal member.
Tip: Choice of fund only applies to Superannuation Guarantee
contributions. It doesn't apply to any additional contributions your
employer may be paying, either voluntarily or as part of a salary
sacrifice arrangement. Nor does it apply to your current account
balance. To avoid ending up with money in multiple funds, check with
your employer.
Trap: Watch out for the costs, and especially 'honeymoon fees'. Choice
will stimulate a lot of competition between funds, and some more
expensive funds may temporarily lower their fees to gain members.
Check that carefully, and also whether there are any exit fees.
Tip: Think long term. One day you're going to want to turn your super
savings into an income to live on. Does the fund you're looking at
allow you to roll over into an allocated pension or term allocated
pension, all within the same fund and with the same investment
options? Asset does, that's why you can think of Asset as your super
fund for life.
Trap: You may be approached about setting up your own 'do-it-yourself'
super fund. That may sound like an attractive idea, but be aware of
the costs involved in setting up and running the fund. According to
many experts, you need to have at least $100,000 in super (some say
$200,000 or more) to make the DIY option worth considering.
Can you do someone else a favour?
The people who will benefit most from
choice of fund are those who, until now, have been trapped in funds
that provide poor value, poor performance or substandard services.
If you know anyone in that situation, maybe you can do them a favour.
Why not suggest they look at Asset Super? After all, the more
members we have the stronger we'll be and the better we can continue
delivering great value.
If you'd like a copy of this article for someone else, or a copy of the
current Product Disclosure Statement,
just call us on (Freecall)
1800 805 981.
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