Thinking about your superannuation can sometimes feel like staring into a fog. You know it's important for your future, but the details can be a bit… much. Thankfully, the Australian Taxation Office (ATO) has a tool designed to cut through some of that complexity: the YourSuper comparison tool.
At its heart, superannuation is simply a way to save for retirement. Your employer is legally obliged to contribute a portion of your earnings – currently 10.5% – into a super account. This money then gets invested by your chosen super fund, hopefully growing over time until you're ready to access it.
But how do you know if your fund is doing a good job? That's where comparison comes in. The YourSuper tool, accessible through the ATO website, is a fantastic starting point. It’s not about telling you which fund is best for you personally – the ATO wisely steers clear of giving financial advice – but it gives you the data to make a more informed decision.
There are two ways to use the tool, and the personalised version, accessed via myGov, is particularly handy. If you log in to ATO online services through myGov, navigate to the 'Super' section, then 'Information', you'll find 'YourSuper comparison'. This is where things get interesting. It can actually show you your existing super accounts and let you compare them side-by-side with other MySuper products. It’s like having your own super accounts laid out next to potential alternatives, all in one place.
What does the tool actually show you? It presents a table of MySuper products, usually ranked by their net returns. You can dive deeper, selecting up to four products to compare in more detail. This allows you to look at things like investment performance over different periods (past 3, 5, and 10 years), the total annual fees you're paying, and even the investment strategy the fund employs. It’s a snapshot of how these funds have performed and what they cost.
One of the most crucial aspects the tool highlights is performance testing. APRA (the Australian Prudential Regulation Authority) assesses the annual performance of MySuper products. You'll see if a product is 'Performing' (meeting or exceeding benchmarks), 'Underperforming' (not meeting benchmarks), or 'Not assessed' (often because it doesn't have a long enough performance history).
Now, this 'underperforming' status is something to pay attention to. If a MySuper product is flagged as underperforming for two consecutive years, it's a pretty significant red flag. These funds are then restricted from accepting new members. This means if your employer uses such a fund as their default option, they'll need to find a different one for new employees. It’s a mechanism designed to protect consumers and encourage funds to perform better.
Even the non-personalised version of the tool is valuable. You can input a default super balance (like $50,000) and your age to get a more tailored view of relevant product options and fees. It’s a great way to get a feel for the landscape, even if you're not yet ready to switch or consolidate.
Remember, the ATO isn't your financial advisor. This tool is a powerful resource for gathering information, but for personalised advice tailored to your unique financial situation, seeking out an independent financial advisor is always a wise step. Websites like Moneysmart can help you find the right professional.
