Thread: Superannuation???

Does anyone on here know much about how super works?

My wife is in the HESTA scheme and she recently got a statement which shows that she had negative interest in the last 6 month. They actually took over $2k from her super account!!!

They are a big scheme and I am sure it is all legal but it just doesn't seem right. She rang up to questio it and was told that her super had an interest rate of -3.5% and so they deduct money. She only works part time so I think she only had about $700 in payments but the overall balance fell by $2.5k.

There is a great deal of myths and confusion surrounding superannuation. Firstly, before taking any action, such as switching funds etc,. take a step away from any hysteria or general advice.

As mentioned previously, different investments options will produce different results.

High Growth, Growth, Shares etc (I do wish the various funds could decide on common titles for their investment options), however, these options with high exposure to shares and property (I'm sorry but property can fall as quickly as shares - Listed Property Trusts) will have significant fluctuations over time.

The greater the return the greater the risk.

Whilst we all enjoy the big returns (and some funds have had returns of in excess of 25% pa recently) we do not like the negative years.

And when the markets fall, it is possibly not the time to be moving your funds.

Chasing last year's "Hero" (or top performing fund) is fraught with danger. History has proven it is too late and last year's hero often ends up being this year's flop.

You are looking for consistency over the long term. And there lies your answer.

Consider your time frame, discuss your individual needs with a CFP in regard to risk and return and ensure you monitor your fund regularly.

Just in passing, Hesta is what is known as an Industry Fund - it is generally accepted an Industry Fund has lower fees, good administration and HESTA has competitive performance.

In your case, the sharemarket has suffered in recent times which is reflected in the negative returns - the fees taken have always been there but just not as obvious as now.

Negative returns seem to make everyone look more closely at their funds.

Specific advice? Get on the phone, look for a Certified Financial Planner who is fee-based, ask him if he/she can provide independent advice on the industry funds - and make sure he/she is a member of the Financial Planning Association (if not, hang-up). Book an appointment - and you interview the Planner - ask him/her all the questions about how they work, what their expectations are regarding their clients, how long they have been in business, their business structure (whether they are expected to sell one investment companys products etc) - and if you think they sell - get up and walk out.

Make sure you have someone with you - and after the interview, have a cup of coffee and discuss the Planner - your gut feeling, whether you thought he/she was genuine etc. Get a planner who you like - and just as importantly - a planner who you think likes you. You will probably only need to interview 2 or three. There should not be any charge for the first interview - if there is, you got it right, walk away.

No doubt every man and his dog has a horror story about someone they knew who got ripped off etc. We all have a story.

You get one crack at retirement - don't mess it up.