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“I was losing money”: How Ben escaped a poor performing super fund

Sad man using smart phone during breakfast at home

After being charged hundreds of dollars in fees and getting poor returns, here's how Ben switched super funds.

If you haven't checked your super fund in a while (or ever!), you might not be too pleased with what you discover. This is exactly what happened to Ben, a Sydney-sider in his late 20s, when he decided to tidy up his finances recently.

"I had a bit of a quarter life crisis during COVID last year. Super was never anything I really cared about until I realised I was getting forehead wrinkles. COVID was the catalyst to getting all my money in order," said Ben.

"I sold my car, invested the money and looked at my super account to make sure it was all going okay. It wasn't."

Don't get caught out like Ben! You can easily keep track of your current super fund in the Finder app.

"The fund had actually lost me money"

Ben's super was with Colonial First State, and he'd had the account opened for just over 4 years. Like a lot of young Australians, Ben never really remembered choosing his first super fund.

"The account was opened for me by my first company. It was a big advertising agency. That was the company's default super fund."

"The fund had actually lost me money in the financial year at the time. And it wasn't like I was in a risky portfolio or anything – it was a 'stable' one. But they were still charging me hundreds of dollars in management fees on top of their negative return."

Just this month, industry regulator APRA revealed 13 super funds that had failed their performance tests. One of the 13 worst performers this year was Colonial First State, along with other major retail funds including AMG Super, BT Super and Commonwealth Bank Group Super.

Under new government legislation, APRA will be naming the worst performing super funds each year, and making sure members of those funds are aware.

"I think it's important the regulator names and shames. Superannuation is a compulsory benefit that you can't access until your later years, so it's easy to forget about it and never check on its performance. But the reality is, these super companies are making money off your capital, and if they can't return the favour, then they need to be held accountable," said Ben.

How Ben switched super funds

Ben said he was surprised at how easy the process was to switch super funds.

"I just looked up the top performing super accounts for the last 10 years. AustralianSuper was the winner by most accounts. I switched over to them and consolidated my super accounts with them. This took me no longer than an hour to do."

When you change super funds most of the work is done for you by your new fund. Once you've picked your fund and joined, it will reach out to your existing fund and organise for your balance to be rolled over for you.

"I felt very reassured in my decision to leave the fund. There was a part of me that, at the time, wasn't entirely sure if it was a worthwhile decision. What if I left only to go to another underperforming fund? While it might be too early to make a judgment call on its performance, so far so good!"

He added, "One thing COVID has taught me is you can blink and 2 years can pass. Check your super and, if it's not performing, change it. You don't owe these companies anything. And if you have an hour to spare, it could mean a lot more money in your pocket later on."

If you haven't checked your super in a while, it might be time to switch. Check out some of the best super funds over the last decade and our step-by-step guide on how to change super funds.

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