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Maintaining your superannuation.

Australian employees and others planning for retirement will need to take a more active role in managing their super in the future. New superannuation legislation , due to come into force in July 2005 gives employees the right to nominate the fund into which their compulsory super is paid. But with that right comes more responsibility. While leaving the money with the existing manager is one option, employees are about to be deluged with offers as the funds compete to market directly to employees.

Most employees are expected to stick with their existing arrangements, but a large number will change. This means that the super fund managers will be battling it out to keep their existing clients and to poach new ones from the competition.

The theory behind the new policy is that consumer choice will encourage a more efficient system. This should lead to lower fees and a better level of service.

The problem is that in reality, consumers will be swamped with information, misinformation, claim and counter-claim. A large mass of confused consumers is an ideal environment for financial sharks to rip off the retirement savings of the gullible.

One danger is that if you are not informed about all of your options you may find yourself confused and vulnerable. Accumulating a superannuation nest egg is a long term process. So you need to stick to a long term plan. Do not get distracted by get-rich-quick schemes.

Do not switch your investments chasing the latest fads. Entry and exit fees will quickly eat up any advantage.

Your financial comfort in retirement can only be secured by a steady accumulation of assets. The relevant number is the performance of your funds after management fees

Unfortunately, the performance of funds is not known in advance. Past performance is only a guide to future performance. The only defence is to become an educated consumer, and to learn how to discern the facts behind all of the hype that is sure to come.

Use these pages and the internet to check out your options, take care and don't rush!

About The Author
Darby Higgs is a Melbourne-based web writer. He is the manager and editor of a website aiming to empower investors in retirement funds to take a more active role in the governance of their money.

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