The 2015 FSC / ING DIRECT Your Super Future report revealed that 35% of survey respondents would be likely to change their provider in the future.
This compares to the findings of previous years, where this figure was only 19% in 2013 and 27% last year – a consistent increase.
ING Direct CEO Vaughn Richtor said the superannuation industry needs to ensure funds are “as simple and transparent as possible” to assist Australians in planning for retirement.
“I am particularly pleased that increasingly Australians are considering switching their super funds to get a better deal on fees, performance and transparency,” he said.
“It shows people are taking more control of their retirement savings.”
How much is enough?
Despite the report’s finding that 88% support Australia’s superannuation system, over half of the respondents (51%) believe their super will not be enough to provide a comfortable retirement.
However, the amount workers believed they required for a comfortable retirement varied a lot, with 46% saying $500,000 was enough while $1 million or more was the right amount for 39% of the respondents.
Research by Roy Morgan Research found that while awareness of superannuation is increasing, retirement is just too far away for, many people to visualise.
“The long-term nature of superannuation and retirement savings already leads to a low level of involvement from many people, particularly those a long way from retirement,” said Norman Morris, Industry Communications Director, Roy Morgan Research.
“The very high level of publicity now coming from the government and opposition regarding the future of superannuation needs to be considered in the context of household net wealth. The more changes that are made to the system, the more likely it will further alienate people from an involvement in their superannuation.”
Over half (55%) said they would supplement their superannuation with income from property and employment.
It seems that most people are willing to sacrifice their current income to secure this comfortable retirement with a big 80% supporting a rise of the superannuation guarantee to 12 percent.
With the current superannuation guarantee of 9.5%, many are keen for this rise to happen as soon as possible.
How to change super funds
Changing super funds is a simple process – you just need to fill out a rollover form through either MyGov or your desired super provider if they have one. To prevent your super from being transferred to someone else, you’ll need to provide proof of identity.
If you are keen to switch your super fund, here are a few things to ask first:
- What insurances does the new fund have?
- Will there be capital gains tax?
- Will there be switching fees?
- What are the investment fees like?
- Are you happy with the investment options?
What insurance do I have on my existing fund? Can I replicate that on my new fund?
You superannuation fund may include a component of life insurance, TPD insurance and income protection insurance. If you switch your fund to a new one, this insurance cover will cease. So make sure you can get this same level of cover with your new fund.
Switching my super fund means selling my existing super fund investments. Will there be any tax payable from my investment money?
Whenever you sell investments there may be capital gains tax to pay. It won’t come out of your own pocket, but that doesn?t mean you won’t be paying it. Confirm with your super fund what the estimated closing balance of your fund will be.
What switching fees will apply?
Does your existing super fund charge a fee to switch? Make sure you know the dollar cost of that fee before making a switch by asking your super fund.
Am I happy with the investment options in the new fund?
Superannuation is just a tax structure – you can investment the money into cash, shares, property and/or a combination of them all. Are you happy with the investment options that your potential new fund offers?
How do the superannuation fees compare?
All super funds charge fees – check what the fees on the new super fund will be and compare that to the fees you are currently paying. You can also read Canstar’s Super Funds Star Ratings Report which assessed 67 superannuation funds, both industry and retail, to determine the value they provide to Australian workers at various stages of their life.
The following table contains details of the superannuation funds rated by Canstar. This table has been sorted by one-year performance (highest to lowest). Please note that the performance information shown in the table is for the investment option used by Canstar in rating of the superannuation product.
Performance is based on the investment option considered in the 2016 Superannuation Star Ratings, which is the option with 60-80% in growth assets; where multiple options satisfy this criteria, the option with 60-80% in growth assets with the greatest funds under management is selected.