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Nobody likes paying bank fees – it’s one of the main reasons most of us only have one bank account. The same should apply to our super but sometimes it doesn’t. Ironically, while we’re happy to whinge about bank fees, 80%  of Australian’s continue to pay multiple sets of fees on super accounts that in most cases they don’t really need and often don’t even know they have.

When you look at these costs over time, we’re talking thousands of dollars wasted on fees. So, if the number of super funds you have is roughly the same as the number of jobs you’ve ever had, it’s time think about consolidating.

Q. What are the benefits to consolidating my super?

By tracking down and consolidating your super into one account, you’ll stop paying unnecessary additional fees and have more money in your account. More money means a higher earnings base and more for you to enjoy when you retire. Consolidation also makes it easier for you to manage and keep track of your retirement savings.

Q. How much could I save by consolidating my super?

What you save will obviously depend on your personal circumstances but let’s say have money invested in four different super funds. For the three funds you are no longer contributing to, you’re being charged $300 a year in account fees. In five years you’ll have paid $1,500 and after 30 years a whopping $9,000 in additional fees. And that doesn’t even include the interest you will have foregone on this amount. 

By consolidating all of your accounts into one, you’ll pay one fee and the money you save will provide a higher base for you to enjoy in retirement.

Q. Are there any things I need to consider before I consolidate?

Insurance benefits - Before you consolidate, you should review your insurance arrangements. Most people generally have some form of default insurance cover with their super. Let’s say you have three super funds and have three lots of default cover. If you become entitled to a payout, you’ll generally get a paid from each of your three insurance policies. But when you consolidate your super, your insurance cover in the funds you consolidate will lapse and you’ll be left with only one lot of insurance cover.  

When you consolidate, you may need to increase your level of cover to ensure you’ll have enough if and when you need it. You should also be aware that you may be required to undergo medical tests if you apply for additional cover.

Exit Fees – Some funds charge a hefty exit fee if you try to move your money into another fund. If this is the case, you might not benefit from the transfer.

Selecting the right super fund – When people do consolidate, they generally roll their super into the fund that they are currently contributing to. While this is the easiest option, you might like to compare all the funds before deciding. Which one has the lowest fees? Which one has the best insurance cover? Which one has the best returns over the medium-longer term?   

Q. What do I need to do to consolidate my super?

There are generally three steps to consolidate your super.

1. Track down all your different super accounts. If you’ve lost contact with your old funds or have no idea where your money is, there are a couple of ways you can find them:

• Search the ATO’s Super Seeker website. All you need is your name, date of birth and tax file number.
• Contact your old employers. They’ll be able to tell you where they paid your super entitlements.
• Search the ASIC Lost Monies Register or the Lost Monies Register in your state.

2. Once you have the details of your accounts you need to decide which fund you want to roll them all into. You will need to fill in a separate consolidation form for each account you want to consolidate. You can usually download consolidation forms from your chosen fund’s website or you can contact them and ask them to post it to you.
 
3. Send your completed forms to your chosen super fund together with certified copies of your identification (your driver’s licence or passport is usually the easiest) and they’ll do the rest.

Q. Why do I have to get my documents certified?

Although it can be time consuming to get your original identification documents certified, it’s a legal requirement that super funds must comply with to make sure everything is kosher with your consolidation request.

There are lots of people who are qualified to certify your documents. So the next time you need to visit your local post office, doctor’s surgery, pharmacy, bank or police station, kill two birds with one stone and take along your documents for certifying. Just make sure you take in the original and the copies.

Q. What happens if I change jobs?

Just because you change jobs doesn’t mean you have to change super funds. Most Australian’s are able to choose which fund their super contributions are paid into. If you change jobs, simply give your super fund membership details to your new employer.

Prime Super is a not for profit industry superannuation fund. This article contains general information only and does not take account of your personal circumstances. You should obtain personal advice where appropriate. Prime Super is issued by Farm Plan Pty Limited (ABN 81 067 241 016, AFSL 219723). A Product Disclosure Statement is available from the issuer by phoning 1800 675 839.