One more big super change for Queensland Government employees

By now many people will be aware the Federal Government brought in some significant changes to the rules around superannuation. If you missed it you can read about them in some of our recent blog posts.

But for Queensland Government employees - including anyone who works for Queensland Health - there was one more big change at the beginning of the financial year. For the first time it is no longer compulsory for Queensland Health employees to use QSuper as their superannuation fund. Queensland Health staff are now free to use any fund on the market or even a self-managed fund.

The big question of course, is should you switch?

Should I stay or should I go?

It's an understandable reaction when given a choice for the first time to want to exercise that choice. Many may assume that QSuper's performance might not stack up given they had a completely captive market.

But the reality is that despite tens of thousands of people having no choice but use QSuper, their performance as a super fund has been quite consistent.

In 2017 and 2016 they were named Super Fund of the Year by Choice Magazine. They have had consistently low fees and strong investment performance. For younger medical professionals, they have a good choice of funds that are well suited to the accumulation phase. It's a solid record.

Reasons for leaving

Having said all that, there are some good reasons you might want to move away from QSuper:

• To start a self-managed super fund (SMSF): some may be attracted to the extra control that can be gained by managing your super yourself. The big question you need to ask is this: am I confident I can achieve superior investment returns than what I'm currently getting at QSuper? If the answer to that question is yes, a SMSF might be for you. But keep in mind there is a significant amount of work that goes into managing a SMSF and the penalties for making a mistake can be severe. Most health professionals already have plenty to keep themselves busy with their day jobs!
• You want to purchase a commercial property: something a lot of our clients have done is use their superannuation funds to purchase their own rooms. This certainly has some merit, but you should keep in mind that you can do this AND still keep a QSuper account.
• You're now retired: once you're no longer working it can be advantageous to have greater control over asset allocation, investment management and income drawdown. If this is something you think you could benefit from, Medical Financial can help guide you through this process.

The bottom line

The simple - if slightly unromantic - answer for the majority of Queensland Health employees is that there may be good reason to stay with QSuper. That certainly doesn't mean you shouldn't explore your options - especially if you fit into one of the categories mentioned above.

But the absolute worst reason to make a financial change is simply because you can.