Why your kids need help with their super

Stop the "Lost Decade of Super"

Young people are typically disengaged with super.
It is really common for them to only realise that their super is disorganised when they turn 26, 27 or 28.
They then regret that they didn’t get their super organised from the start, when they were 16, 17 or 18, or earlier.
Instead they have a "lost decade of super".
It’s the result of:
  • high fees eating low balances to zero
  • inappropriate, unrequested life insurance
  • duplicate accounts from multiple jobs, and lost super.
This first decade will be the decade where the contributions compound for the longest period of time.

It’s not the decade to waste.

Protect small super balances from high fees

The "zig zag of death"

Many young people get their first job over the summer holidays. Most will just leave it up to their boss to choose a super fund for them.
At the end of the holidays they might have a few hundred dollars in their super account. The super fund then charges them fees to manage their account. Because their balance is low compared to the fees charged, the fees and other costs can erode the account to zero.
The young person can end up with nothing!
This can repeat with each summer job, especially if they open a new fund with every new job.
Each summer a new account is opened, a small balance is deposited, but it is eventually eroded back to zero. We call it the super "Zig Zag of death". And it's a common problem for young Australians.
This example is illustrative only.
Assumptions for other funds with fees – pink line
  • Student starts new job every Christmas and earns $261 of super, working 20 hours per week for 6 weeks.
  • Student is charged fees of $78 p.a. and 1.03% to manage their super. This is the median fee for MySuper funds as per SuperRatings. Fees are deducted before investment earnings.
  • Student is auto-enrolled in life insurance and is charged $58 p.a. for this cost. The life insurance cost is an approximation based on a comparison of a number of super funds performed by Chant West, that Student Super commissioned. The estimated insurance cost is based on the cost for $50,000 of death and TPD cover for a 21 year old blue collar male and is an approximate figure only.
  • Student earns 5% p.a. investment return which is the 10 year median return for Growth funds per Chant West, as at 30 June 2017.
Assumptions for Student Super – blue line
  • If the Student was with Student Super they are assumed to have been charged $0 to manage their account and their balance is invested in cash which is assumed to return the RBA cash rate which is 1.5%.

Our solution: zero fees for balances under $1,000

This means your child can build up a super balance, without fees eroding it to zero.
We also provide a 50% discount to our weekly administration fee for all members with a balance between $1,000 and $4,999, helping your child get ahead.
After this our fees are $78 and 0.99% of their account balance p.a. For more information about fees check out our fees page.

Your kids could be charged for life insurance

Life insurance can be great, especially if you have kids. But what if they are 17 and working a casual job? Does it make sense to be paying for life insurance?
The federal government is making changes to “stop superannuation funds forcing young people under 25, or with low balances, to pay for life insurance policies they have not asked for, or need”*, but this bill won’t come into play until July 2019.
In the meantime default super funds will automatically provide life insurance to all members, and charge extra fees for this. Because it’s automatic, many young people are completely unaware that they have insurance cover and are being charged a premium for it.
Worse, if your child has multiple super funds, they may end up with duplicate insurance and fees.
But worst of all... if they have a very low super balance (e.g. because they’re young), the insurance charges can contribute to eroding their account to zero.
*Scott Morrison, 2018 Federal Budget Speech

Life Insurance

Student Super does not offer life insurance. This helps us keep our fees low.

Parents are key to their kid’s financial future

It’s tough being parents. You do your best to set your kids up to have the best start in life.
You’ve been there for your child at every stage of their life. From their very first steps to their first day of school.
You helped them pick which subjects to study, you taught them to drive, you probably even helped them open their first bank account.
We have one more thing to add…
Help your child get their super organised from the start.
Right now, you are the only person who both cares about them, and understands that super can make a significant difference to their life.

You’re not just their parent, you’re their #1 financial guide

Help your child get their super organised from the start.