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Sam started a new job last week. He arrived on his first day and was given a stack of papers by his new employer. He takes them home and fills in the important ones - the bank details form and the tax file number declaration. There’s one in there about superannuation but he doesn’t really pay any attention to it – he doesn’t want to rock the boat and is happy to have his super paid to his employer’s default super fund.

If this was Sam’s first job he’d have nothing to worry about. But it’s not. It’s his fourth and assuming he did exactly the same thing for his previous jobs, it’s likely he now has four different super fund accounts.

If this scenario sounds familiar to you you’re not alone. The majority of working Australians have more than one super account. In fact a CHOICE study on super found that in 2008 there were almost 32 million super accounts and only 10.7 million workers. When you do the maths it works out to around 3 super accounts per person.
 
What most people forget (or don’t know) is that: a) it’s better in the long run to have just one super account, and b) that just because you change jobs doesn’t mean you have to change super funds.

Starting a new job – your rights and entitlements

Most Australian workers are entitled to choose where they would like their super contributions to be paid. When you start your new job, if you do want your super to be paid into a particular fund, all you have to do is give your employer the details of your chosen super fund together with a copy of your fund’s letter of compliance.

Most employees are also allowed to change their choice of super fund once every 12 months, so it’s never too late to consolidate your super into one easy to manage account.

Q. What are the benefits of having just one super account?

If you have more than one super account, you’re paying more than one set of fees. Over time, this could be thousands of dollars wasted on fees. Plus, when you have multiple super accounts, it’s much harder to keep track of and properly manage your retirement savings.

By having just one super 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.

Q. How much could I save by having just one super account?

What you save will obviously depend on your personal circumstances but let’s say you have money invested in four different super funds. For the three funds you no longer contribute to, you’re being charged a total of $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. If you have three super funds and 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 member benefits? And even though past performance is no guarantee of future performance, which one has the best returns over the medium-longer term?  

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

Once your employer is contributing to your chosen super fund the next step is to consolidate any other super you have in other funds. 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 - www.ato.gov.au/superseeker. 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 (www.asic.gov.au/unclaimedmoney) or the Lost Monies Register in your state.

2. Once you have the details of your accounts you will need to fill in a separate consolidation form for each account. 

3. Send your completed forms to us together with certified copies of your identification (your driver’s licence or passport is usually the easiest) and we’ll do the rest.