Retirement
You don’t want your fund to get this wrong
It’s easy to fix but if savers don’t know where to look, this mistake can cascade and become “very expensive”.
You don’t want your fund to get this wrong
It’s easy to fix but if savers don’t know where to look, this mistake can cascade and become “very expensive”.
It’s not endemic in any organisation, but administrative errors are prevalent in most superannuation funds and can have untold consequences, the principal consultant at QMV, Jonathan Steffanoni, said at a media briefing in Sydney on Tuesday.
For example, if you, your superannuation fund or your employer gets your date of birth wrong, you could pay higher insurance fees and receive a different level of cover.
“That cascades if you've got asset-based fees. Get your premiums wrong, there's your asset balances wrong,” he said.
That’s in addition to ramifications around eligibility to draw down funds
“You get this cascading effect where things get really complicated to fix and the longer it takes to fix [the more expensive it becomes],” Mr Steffanoni said.
He said it’s not just super funds that can slip up in this area as employers can also make accidents, or deliberately cut corners in some instances.
“In the super context, the controls aren't necessarily mature and strong enough at ensuring that data coming from employers is accurate despite the expectation that it is,” Mr Steffanoni explained.
“A dummy date of birth is something that's often used by employers that have a transient workforce. They might cut corners. If you do the analytics on a lot of databases, you will see atypical spikes for some.”
The good news is that it’s easy for savers to check their fund has it right, he added. Touch-points like statements or online portals are good places to start.
It’s also an important step for members to take.
QMV managing director Mark Vaughan added, “If identified early the remediation cost is minimal. However, if the error is not identified for a month or more, it can filter into monthly processes, and may impact investors who may have left or transferred products – such as from super phase to pension phase.
“If left unchecked, the error can affect annual processes such as member statement and ATO and APRA reporting. In this case it may be considered a breach, and will be expensive to remedy, not to mention to negative impact it has on the fund member.”
RELATED ARTICLES
Superannuation
Australia's super performance test transforms investing: What's the next move?
APRA’s latest performance test has done more than name and shame lagging super options; it has rewired investment strategy, compressed fees and accelerated consolidation across the $3Read more
Superannuation
Australia's super test dilemma reform could boost long-term gains while keeping accountability sharp
APRA’s latest performance test results have reignited a structural debate: can Australia hold funds to account while still backing the nation’s long-horizon investment needs? With the government ...Read more
Superannuation
Super funds rethink strategy as APRA's performance test hits a fork in the road
The latest performance test results have reignited debate over Australia’s superannuation benchmarking regime and prompted a formal government review. Behind the headlines, boards are quietly rewiring ...Read more
Superannuation
Aware Super enhances digital tools for financial advisers, boosting efficiency and client engagement
Aware Super has unveiled a suite of new digital features designed to streamline the workflow for financial advisers and their clients. This significant upgrade includes direct data feeds to Xplan and ...Read more
Superannuation
Super funds flip the script as APRA's performance test sparks strategic overhaul
Australia’s performance test has lifted the floor on retirement outcomes—and divided the industry in the process. After early shockwaves, failure rates have fallen and fees have trended down, but ...Read more
Superannuation
Rewiring Australia’s super performance test: from compliance brake to capital engine
Can an accountability tool double as a nation-building lever? Canberra’s review of the superannuation performance test aims to preserve member protection while freeing funds to back long-dated assets ...Read more
Superannuation
Superannuation guarantee rate rises to 12 per cent as parental leave changes take effect
The superannuation guarantee rate has increased from 11.5 per cent to 12 per cent from Tuesday, with super contributions also being added to Commonwealth Parental Leave Pay for the first time. Read more
Superannuation
Rest's Sustainable Growth option achieves highest sustainability classification
Rest superannuation fund has achieved the highest sustainability classification for its Sustainable Growth investment option from the Responsible Investment Association Australasia. Read more
Superannuation
Australia's super performance test transforms investing: What's the next move?
APRA’s latest performance test has done more than name and shame lagging super options; it has rewired investment strategy, compressed fees and accelerated consolidation across the $3Read more
Superannuation
Australia's super test dilemma reform could boost long-term gains while keeping accountability sharp
APRA’s latest performance test results have reignited a structural debate: can Australia hold funds to account while still backing the nation’s long-horizon investment needs? With the government ...Read more
Superannuation
Super funds rethink strategy as APRA's performance test hits a fork in the road
The latest performance test results have reignited debate over Australia’s superannuation benchmarking regime and prompted a formal government review. Behind the headlines, boards are quietly rewiring ...Read more
Superannuation
Aware Super enhances digital tools for financial advisers, boosting efficiency and client engagement
Aware Super has unveiled a suite of new digital features designed to streamline the workflow for financial advisers and their clients. This significant upgrade includes direct data feeds to Xplan and ...Read more
Superannuation
Super funds flip the script as APRA's performance test sparks strategic overhaul
Australia’s performance test has lifted the floor on retirement outcomes—and divided the industry in the process. After early shockwaves, failure rates have fallen and fees have trended down, but ...Read more
Superannuation
Rewiring Australia’s super performance test: from compliance brake to capital engine
Can an accountability tool double as a nation-building lever? Canberra’s review of the superannuation performance test aims to preserve member protection while freeing funds to back long-dated assets ...Read more
Superannuation
Superannuation guarantee rate rises to 12 per cent as parental leave changes take effect
The superannuation guarantee rate has increased from 11.5 per cent to 12 per cent from Tuesday, with super contributions also being added to Commonwealth Parental Leave Pay for the first time. Read more
Superannuation
Rest's Sustainable Growth option achieves highest sustainability classification
Rest superannuation fund has achieved the highest sustainability classification for its Sustainable Growth investment option from the Responsible Investment Association Australasia. Read more
