Commonwealth Super Boned Me
November 7, 2008 | 7 Comments I just received my superannuation statement for the 07 / 08 financial year, and I'm damn pissed off. Through my employer we have our super with Commonwealth Super Option, we've been with them since 2001, and up until this past year they've performed alright. I've never made any money from them, but I've never lost any money. Till now!
- according to my account summary I had $47,685.21 in the fund as at 01/07/2007
- my employer contributed $7,850.66 between Jul 2007 and June 2008
- I was charged a contributions tax of $1,177.60
- I was also charged an administration fee of $71.40
Taking into account the above figures you would expect that I would have a balance in the vicinity of $54,286.87. Well let me tell you, it aint, it ended up around the $47,000.00 mark....
And this is BEFORE the financial meltdown, I can't even imagine what I would've lost now.
Fuck me!
My super portfolio is split between shares and 'aggressive' and they both had double figure losses for the financial year, and going through the rest of the options just about every portfolio option had loses. And this is BEFORE the financial meltdown. You're kidding me right! I thought these people were professionals at managing money?
So what's the answer to all this? Good question.
At the moment I'm researching Self Managed Superannuation Funds. By the looks of it I am able to manage my own superannuation from here on out and I will most likely take whatever I have left, cut my losses (fuck you Commonwealth Super Option), and put it into a couple of bank accounts, one a term deposit and the other a standard savings account.
I'll have my employer pay my superannuation into the savings account each quarter and leave it there until the term deposit matures and as the term deposit matures I will add to it with whatever the savings account has in it. Keep it simple.
I'll let you know how I get on with setting up a Self Managed Superannuation Fund, I'm sure there will be hoops and other assorted things I'll have to jump through. At least I'm not going to get boned any more by Commonwealth Super Option.
Reader Comments (7)
Thumbs up for self-managed fund! My parents have one and the control you have of your own money is fantastic. My partner & I are thinking of creating one very soon...goodluck to you!
I wouldn't worry about it too much until you're 5 years out from retirement. The market will swing back around at some point, and because of your agressive super you'll see the benefits straight away, whereas people with a defensive portfolio won't. When you're close to retirement, pay attention and switch to defensive.
If you're unhappy with your fund though, get the hell out of it...
Saw you comments on your Super Statement as at 30/6/08.
> I'm jealous. I wish my account only went down so much. Just wait till
> you get your 30/6/09 Statement it will be down again.
>
> You need to do more reearch before putting your views into print.
> The Australian share market started dropping in November 2007. The
> Global Meltdown started much earlier in the USA due to the sub-prime
> loans being made by financial institutions to no-hopers to buy a home
> knowing that they could not afford the repayments. This is what
> started the global mess we have now.
>
> Did you look into fees for Self Managed Super Funds and the com-
> pliance obligations you have as a trustee. The government is
> suggesting that a person needs a minimum of $150,000 to start a SMSF
> because of the fees.
>
> So what do you do? The super has lost value. It is unitised and you
> have not lost units. As markets recover (and they will) the unit
> prices will recover and you will have back what you think you have
> lost. Super is a long term investment and strategies are there to give
> you the best return (as per risk) over the long term but subject to
> short term volatility. My job is to educate people on super and the
> message you sent out is thankfully not shared by most people.
>
Saw you comments on your Super Statement as at 30/6/08.
> I'm jealous. I wish my account only went down so much. Just wait till
> you get your 30/6/09 Statement it will be down again.
>
> You need to do more reearch before putting your views into print.
> The Australian share market started dropping in November 2007. The
> Global Meltdown started much earlier in the USA due to the sub-prime
> loans being made by financial institutions to no-hopers to buy a home
> knowing that they could not afford the repayments. This is what
> started the global mess we have now.
>
> Did you look into fees for Self Managed Super Funds and the com-
> pliance obligations you have as a trustee. The government is
> suggesting that a person needs a minimum of $150,000 to start a SMSF
> because of the fees.
>
> So what do you do? The super has lost value. It is unitised and you
> have not lost units. As markets recover (and they will) the unit
> prices will recover and you will have back what you think you have
> lost. Super is a long term investment and strategies are there to give
> you the best return (as per risk) over the long term but subject to
> short term volatility. My job is to educate people on super and the
> message you sent out is thankfully not shared by most people.
>
Saw you comments on your Super Statement as at 30/6/08.
> I'm jealous. I wish my account only went down so much. Just wait till
> you get your 30/6/09 Statement it will be down again.
>
> You need to do more reearch before putting your views into print.
> The Australian share market started dropping in November 2007. The
> Global Meltdown started much earlier in the USA due to the sub-prime
> loans being made by financial institutions to no-hopers to buy a home
> knowing that they could not afford the repayments. This is what
> started the global mess we have now.
>
> Did you look into fees for Self Managed Super Funds and the com-
> pliance obligations you have as a trustee. The government is
> suggesting that a person needs a minimum of $150,000 to start a SMSF
> because of the fees.
>
> So what do you do? The super has lost value. It is unitised and you
> have not lost units. As markets recover (and they will) the unit
> prices will recover and you will have back what you think you have
> lost. Super is a long term investment and strategies are there to give
> you the best return (as per risk) over the long term but subject to
> short term volatility. My job is to educate people on super and the
> message you sent out is thankfully not shared by most people.
>
Remember in setting up a Self Managed Fund you have a lot of responsibilities & costs, such as the Trust Deed (and any amendments when legislation changes), Accounting Fees, Annual Audit Fees, investment buy/sell costs.
And don't forget insurances that may be on your present fund, lost when you move out to a new fund.
There are pitfalls & markets do recover. Be atient & leave investing to the experts.
That's true. When I originally posted that rant I was pretty upset with the performance, not just this year but for the last couple of years. It just seemed like Commonwealth Super were charging obscene fees for who knows what.... I've since been looking at starting up with a new fund manager, and of course there's no point doing anything with the Commonwealth Super at this stage as I would completely lose my money rather than just waiting the markets out..
Thanks for your comment though, much appreciated.