The Reality Business

Archive for February 14th, 2012

You’ll rely closely on your pension fund for a significant proportion of your life, dependant on these businesses for the most essential social element of life – money. It pays to select the right one – but how do you know in advance which allocated pension funds will give you the overall ideal experience? This day we check out the 6 things you should know about any pension fund you think about choosing to manage your superannuation funds in retirement.

Investment: Past and Future Performance
All pension funds should give you access to their past investment figures for review when you are assessing pension funds.

Of course, no pension fund can tell you how their investments will perform in the future. If they had that crystal ball, they’d no doubt be in the sports betting business instead! Therefore, you should ask about their investment methodology and risk profiles, and decide whether the amount of risk is suitable for you.

Fees and Charges
Any pension fundcan wage you with an overview of their fees and charges, including how they are structured. Once you select an allocated pension fund though, you should make an assessment of how transparent the fees are. Did you get hit with a lot of obscurely disclosed, unexpected charges? If so, think about moving.

Administration and Customer Service
How long do you have to move on hold to talk to a customer service representative? Do you have the option of face-to-face contact? Are there net-based self-service facilities? Are the service staff proactive and responsive when you bring up issues with them?

Governance Processes and Risk Management
How secure is the actual business you have chosen to be your allocated pension fund? Are they governed conservatively, or with a substantial relative amount of risk?

Product Flexibility
You will hopefully have many long retirement years ahead of you, and your financial situation might change in that time. Think about whether an allocated pension fund has the flexibility in their product offering to meet your potential future needs.

Advice and Education
The greatest ‘product’ you can purchase is knowledge. Good pension funds offer member education and financial planning services to help you retire effectively, while making sure your pension fund is managed responsibly.