You would have recently received your superannuation statement and after an initial glance you have probably filed it away. Get it out again, statements are often long complicated documents but it is not difficult to extract important information which might be critical to your financial health.
Superannuation is an investment for your retirement but more importantly it holds personal insurances for you .These insurances could extend to a Death benefit, a Total and Permanent Disability Benefit and possibly a Temporary Salary Continuance Benefit ( which you might know as Income Protection or Sickness and Accident insurance). Not all superannuation funds provide insurance benefits for its members.
Back to the statement:
Follow these three easy steps to better understand your super fund statement. Use a highlight pen to mark the relevant sections .
Step 1
What is the balance of the account?
What is the difference between last years balance and this years?
What contributions have been paid by your employer and by yourself ?
Are payments up to date and the correct amount?
What have been the administration and insurance costs?
Step 2
How is your super money invested?
Many funds have different names such as Growth Funds, Balanced funds and Cash funds.
What you need to do is work out how much of your money is allocated to shares ,property, cash and bonds and understand the level of risk within the fund compared with the risks you want to take.
Step 3
How much is the Death Benefit? Does the total amount include the fund balance or is it in addition to the fund balance?
Many employee super funds have a unitised system of cover. All members pay the same weekly rate for Insurance benefits but the level of cover decreases as you get older. You can buy extra units of cover by having a greater premium deducted from your fund. You should have a clear idea about how much you want to leave your dependents or your estate.
How much is the Disability Benefit. Is the amount in addition to the fund balance? Is it stand alone cover or is it linked to the Death Benefit? If it is linked and you received a payout for Total and Permanent Disability you would no longer have a Death benefit within your fund.
Is there insurance to cover your income if you are unable to work following an accident or an extended period of illness? What is the monthly benefit and how long would you get paid the benefit? Is there a waiting period before I am paid a benefit?
Finally ask yourself, do the benefits of my super fund match my needs?
If they do not then you need to investigate how to make some changes to your fund.
If you need assistance contact your fund or a qualified Financial Planner. A better understanding of what your super fund can provide for you will make it a far more valuable investment.
