4 questions to ask yourself before choosing your employer’s default fund

Your super could be one of the most important investments you ever make, yet many of us let someone else decide where our money goes.

Everyone has the right to choose their own super fund in Australia. But for one reason or another, lots of us end up sticking with our employer's default option.

But the default option isn't always best for you or your future. Why? Well, you might find yourself with multiple funds and fees, which can add up quickly over time.

The good news is with just a little research, you might be able to find a fund that fits you far better, comes with lower fees, and returns more money too.

Not sure where to start? Don't worry. We're answering four important questions you should ask yourself before signing up with your employer's default super fund. And remember, if you're already with the default, you can still switch whenever you have a few minutes spare.

1. How do the fees compare to others in the market?

Understanding super fees is an important step to figuring out if your fund is giving you good value for money.

There are lots of different fees associated with super, like admin and investment fees. So, it's a good idea to keep an eye out for the 'total annual fee' and to make sure it includes admin and investment fees.

From there, you can compare super funds to find one that has a low admin fee. And remember, if a fund has a higher investment fee it might be a sign that they're performing well.

2. How is the long-term past performance?

Your super could determine how you spend your retirement. So you should also look at whether it performs over the long term.

Nobody wants a fund that won't deliver decent returns. While there's no way to truly know how your fund will perform in the future, looking backwards can offer some insight.

Make sure you look beyond the last year or so, around seven or 10 years. Super funds are a long-term investment and if you're still a way off retirement, short-term fluctuations don't matter as much as the big picture.

Just remember to compare like-for-like, though.

Only compare a balanced option's performance from the last 10 years with another balanced option from the same time period.

3. What insurance cover is there?

Super funds typically offer three types of insurance automatically: life cover, TPD insurance, and income protection. The income protection portion may be standard or an optional extra, depending on your fund.

Keep in mind, cover varies between funds, as does the cost and the conditions under which you can claim.

4. How can I access my account?

Keeping an eye on your investments is a good habit to get into. So look for a fund that makes it easy for you to keep on top of what your super is doing in a way that's easy for you.

For example, some funds have an app that makes it easy to monitor your super balance, see forecast returns, and keep an eye on fees.

Handy tools like this can also make it easier for users to boost their super with additional contributions when things are going well. So it's worth checking if your fund has one.

Learn more about getting your super sorted with Aware Super

General advice only. Consider your objectives, financial situation or needs, which have not been accounted for in this information and read the relevant PDS and TMD before deciding to acquire, or continue to hold, any financial product.

Sponsored by Aware Super Pty Ltd (ABN 11 118 202 672, AFSL 293340), trustee of Aware Super (ABN 53 226 460 365).