The more superannuation accounts you have, the more you could be paying in fees. As a young professional, you may have accumulated multiple super accounts from your previous jobs.
Having multiple super accounts can erode your balance due to fees. That’s why it's important to understand how consolidating your super could help you save money and build wealth.
Super account fees: how they work
All super funds charge some form of fees which are deducted from your super balance. So when all else is equal, you could grow your super balance faster with lower fees. For example, when it comes to your super, a 1% difference in fees could equate to 20% in 30 years.
The common fees charged by super funds include:
Administrative fees - to cover the expenses of running the fund,
Investment management fees - to cover the costs of managing the investment and
Insurance costs, such as life insurance - included by default in many super funds.
Other fees could include switching fees and advice fees. Your annual superannuation statement, product disclosure statement, and the fund's website will provide information about the fees that you’re paying for your super fund.
What consolidating super means
If you’ve worked multiple jobs, you may have multiple super funds. Having multiple super funds means you’re paying duplicate fees and insurance premiums. Consolidating super basically means combining all of your super into a single account. As the account owner, you can choose which account and combine all of your super together.
While there's no requirement to consolidate multiple super accounts, having one account can be easier to manage, and can minimise fees and paperwork.
How to consolidate super accounts
You can start by reviewing super accounts to decide which one is best for you. It might be one that you are already a member of, or it could be a completely new one.
Fees - Compare the fees charged in each fund. This could be calculated by a percentage of your super balance and/or a fixed amount.
Insurance - What insurances do you have with your super accounts? Which policies do you want to keep? And if you’re looking at new super funds, which offers the best insurance options and costs for you?
Performance - Have a look at the performance of your super funds. You can also check return targets with different investment options available.
Total balance - Add up the total super you hold, then find out expected fees and returns with each super fund.
After checking the above, you'll get a good idea of which fund might best suit your needs. If it's a new fund, you'll need to open a new account. Ask the super fund how to transfer existing super balances to the new account. You might be able to consolidate over the phone, online, or via mail. Make sure you get all the account details to give your employers.
At Professional Super, you can find all of your old super funds using our “Super Search Party” and combine them in a couple of minutes. All you have to do is join the fund, then:
Add your Tax File Number.
Use the menu to go to the page called “Super Search Party”.
We’ll then send you a security code via SMS. Once you enter the code, you will see all of your funds including any lost super. From there you can select which accounts, and how much you want to combine.
When you start your new job you will need to complete a superannuation standard choice form. To nominate your super fund, go to Section A and select the right option. These can often cause confusion, so you may want to contact your super fund and get their help completing the form.
You can change where your super is paid even when you’re not starting a new job. You just need to notify your employer of your new super fund details.
At Professional Super, we’ve made it easy to notify your employer. Just go to our “Tell Your Employer” page and press send. Then we’ll email you a pre-filled form with all the details your employer needs.
Getting your super organised
Having multiple super funds can cost a lot of money and erode your super balance. At Professional Super, we’ve made it easy to get your super organised. And it only takes a few minutes. If you need more help, speak to our team today.
This is general information only and does not take account of your individual investment objectives, financial situation or needs. Before acting on it, consider if the information is appropriate and whether you need to speak to an accredited professional.
You should also consider the Product Disclosure Statement before making any decision. This product is issued by Tidswell Financial Services Ltd (ABN 55 010 810 607, AFSL No. 237628, RSE L0000888) as trustee for Student Super Professional Super which is a sub-fund of the Tidswell Master Superannuation Plan (ABN 34 300 938 877, RSE R1004953). Student Super Professional Super Pty Ltd (ABN 31 617 160 791; AFSL No. 499786) is the Founder and Promoter of Student Super Professional Super which is marketed under two brands; Student Super and Professional Super.
Past performance is not indicative of future performance.