Superannuation has a strong reputation as a secure and well-managed investment so, for the most part, you can rest easy that your super is in safe hands. The reported cases of super fraud are few and most funds have their own safeguards in place to protect against illegal activity. However, there are steps you can take yourself to make sure your superannuation stays protected.
1. Read your annual member statement and fund’s annual report
Your annual statement covers the financial year so should be in your mailbox during September or October. If you haven’t received it or, when you do, it doesn’t provide many details, it could be a sign of poor administration or other problems within your fund. If you don’t understand something on your statement, contact your fund – remember, you are the customer and are paying the fund to look after your super.
In your fund’s annual report pay extra attention to the auditor's report and any statement casting doubt on particular investments. This report is your chance to have a look at your fund’s investment strategy. Diversification (or having a variety of types of investments) reduces the risk when it comes to investing so there’s less chance of your super balance going down. The fund's money should not be invested in only one or two companies or properties.
2. Keep your statements safe
Like your bank statements, superannuation records can be used to commit identity theft if they fall into the wrong hands. Always keep your statements in a safe place or if disposing of them, tear them up and don’t leave them somewhere visible where they can easily be picked up.
3. Beware of scams
Anyone offering you early access to your super is most probably not legit. Except in very limited circumstances, accessing your super before you reach the legal age (minimum 55 years old) is illegal.
Also be careful of funds claiming to offer very high 'guaranteed' investment returns or unbelievable tax concessions. Remember the old maxim: If it sounds too good to be true, it probably is!
By getting involved in scams, you risk losing your super savings or having to pay massive tax penalties for drawing super early.
If you feel concerned about your fund, contact the regulator that looks after superannuation funds, the Australian Prudential Regulation Authority (APRA).
You can report offers you suspect may be a scam to ASIC via its online complaint form or on 1300 300 630, or to the ATO on 13 10 20.
You can also check ASIC’s Australian Financial Services licensee register or APRA's Registrable Superannuation Entity Disqualification register if you think an operator appears suspicious.
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