Choosing the right super fund
Choosing the right super fund today can make all the difference in retirement. It’s important you take some time to understand what you should be looking at to find the right super fund for you.
As an employer, you must nominate a super fund for those employees who can't or don't choose their own fund into which you'll pay their future super contributions. This fund is called your employer default fund.
Top things to consider when choosing your business default superannuation fund:
- Easy administration;
- Benefits for your employees;
- We are a MySuper compliant fund.
When selecting a super fund, usually the choice is yours! But how do you know which one to pick? Depending on your age and personal situation, the answer will vary.
A good thing to do is make a list of what’s important to you now and for your future. Understand your risk appetite, and where and how you want to invest your money. Do your research to find the fund that meets your needs.
Things to think about when choosing a fund
There are a few things to keep in mind when choosing the fund that’s right for you. Find out more about what you should be thinking about below.
- Fees – how much will it cost you to invest your money with each super provider you are considering? What other fees do they charge e.g. switching fee?
- Investment strategy – what type of investor are you? Are you happy for your money to be invested in options where there is opportunity for high growth, but also potential losses? There are some great tools out there to help you understand your risk appetite.
- Investment options – you can choose how much control you have in managing where your super is invested. Depending on your confidence level, you may like an option where the super fund invests your money for you based on your age. Find out more about Virgin Money Super’s investment options.
- Insurance – what are your personal circumstances and do you have enough cover? Understanding the type and level of insurance cover you do and don’t get through your super, and understanding your insurance needs will help you assess the fund that’s right for you.
- Fund performance – how has the fund performed over a longer-term? Super is a long term investment. So it’s important you look at the performance of each fund over a longer time period, across the full portfolio, in particular the investment options you may want to select to see if they will help you achieve your retirement goals.
- For Employers - Be registered by the Australian Prudential Regulation Authority (APRA) to offer a MySuper product. Virgin Money Super is a MySuper authorised fund that can act as a default super account for your employees who do not choose their own super fund when they start a new job.
Virgin Money Super’s MySuper product is the Lifestage Tracker investment option. This is a life cycle investment strategy with a mix of growth and defensive assets, which are adjusted based on your age as you get older. Generally speaking, MySuper products are superannuation products that have a simple set of product features, irrespective of who provides them. This enables comparison of funds based on a few key differences.
Small differences in fees can make a large impact on your savings when you retire, and each provider will have different fees depending on their offering.
The main types of fees include:
- Administration fee – The general administration fees that cover the cost of keeping your super account.
- Investment fee and Investment direct cost ratio – The fees for managing your investment, which can vary depending on the investment options.
- Contribution fee - Fees to cover the administration expense of receiving and investing your contributions.
- Adviser service fee - Fees for personal advice you receive for your super and other investments. Your adviser may also receive commissions for investments they recommend to you.
- Insurance premium - The cost of insurance provided through your super fund. Many super funds have a default insurance option. You can usually choose to lower or increase your cover based on your needs.
- Investment switching fee - The fees for changing investment options within your super account.
- 3% Fee Cap - From 1 July 2019, if your super account balance is less than $6,000 at 30 June of any year, the total combined amount of administration fees, investment fees and indirect costs charged to you for the prior year is capped at 3% of your super account balance. Any amount charged in excess of the cap must be refunded. The cap will apply for the year ending 30 June 2020 and later years.
Find out how the fees at Virgin Money Super compare to other funds.
Please take a look at our Product Disclosure Statement. Also note, this information does not constitute personal financial product advice, and you may like to consult your financial adviser before making a decision about whether Virgin Superannuation fits your objectives, financial situation and needs.
The aim of superannuation is to grow your money over longer periods of time. Since your money can rise and fall in shorter periods - sometimes in a day – it’s better to look at how your fund performs over time.
All super funds will give you information about the performance for each of their funds.
Make sure you don’t look at performance in isolation. Other factors like fees, investment options and insurance benefits can all affect the amount of growth in your account.
TIP: Because super is a long term investment, it’s best to view the performance of the fund over at least a 5 year period.
Since a key component of superannuation is long-term growth, the way your super is invested is critical to your balance for retirement. Some people will be happy to let their super fund choose how the money is invested; others will want to choose their investment mix.
TIP: Not confident? No problem. You don’t have to select your own investments. Most super funds offer an option to do it for you.
How hands on do I want to be with my superannuation?
Many funds offer an index tracking fund like the Virgin Money Lifestage Tracker® option. Index tracking is a long-term strategy. It’s designed to work with the markets over time to grow your investment as much as possible. Essentially, your money is invested based on your age. When you’re younger, your money goes into higher risk investment options to gain the greatest growth. As you get closer to retirement age, your money is invested in lower risk, lower return options.
If you understand more about investment options, share prices and market movement, you may want to take more control and manage your money. Depending on where and how you want to invest your money, it’s a good idea to find a super fund that has the right level of choice for your needs.
What level of risk would I be comfortable with?
When it comes to risk, your comfort levels are completely personal. Remember all Virgin Money Super customers are able to call our team of advisers to get limited financial advice based on how you want to invest your money. Contact the Customer Care team on
1300 652 770.
Virgin Money Super investment options
When you’re making contributions into your super fund, you can choose how your money is invested. Virgin Money Super offers you two options for your investment strategy:
- You can choose to let us invest your money for you in our Lifestage Tracker® investment option.
- Take control and choose where and how much of your money you want invested from a range of options, all selected from our investments menu.
In the end, it’s all about the people you love. Taking out insurance through a super account can be an easy (and tax-effective) way to look out for them. Payments can be paid directly from your account, allowing you to keep more of your after-tax pay to spend on the things you love.
With Virgin Money Super we offer you a range of insurance benefits including:
- Automatic insurance cover – pre-approved Death & Total and Permanent Disablement (TPD) insurance (on an opt-out basis) based on your age.
- Tailored insurance cover - choose the level and type of cover you’d like to apply for:
- Death only, or
- Death and TPD cover, and/or
- Income protection cover.
Combining superannuation with insurance means your insurance payments come straight out of your superannuation account.
So when choosing a fund, think about whether you'd like your superannuation and insurance under the one roof.
We’ve just given you a snapshot here, but you can find full and detailed information about our insurance options.
Important information about insurance:
Recently on 1 April 2020, Putting Members' Interests First legislation (PMIF) has been introduced. PMIF has introduced new rules to help young people and those with low account balances to help sustain and maintain their accounts by removing insurance cover which can erode or prevent your super balance from growing. From 1 April 2020 Virgin Money Super is not, by law, able to automatically provide insurance cover to anyone under the age of 25 and/or with a balance of $6,000 or less.
This legislation has come as an addition to the Protecting Your Super Package (PYS) legislation introduced by the government on the 1 July 2019 last year, designed to protect member’s super savings from unnecessary fees and insurance premiums on inactive low-balance accounts.
More information available here.
TIP: Look at your personal situation and needs to decide whether you would like to have insurance with your super.
How to make super work for me
You’ll definitely want a big super balance at retirement. You can do this by:
- Making contributions
- Having strong investment performance and strategy
- Paying less in fees
The section on building your super contains all you need to know about making contributions.