Combine My Super
Lots of australians have more than one superannuation fund running; this can be for a number of reasons, the most common reason being moving employer and paying into their chosen superannuation fund. There are a number of arguments for combining your funds.
Fees and charges
Each superannuation fund will charge fees, and you will pay these fees for each superannuation fund that you have open. The more funds you have open, the more fees you will be paying; if a fund attracts fees of $10,000 over a 30 year period, you only want to be paying this once. If you consolidated your supers, the amount currently being paid in fees will be available to you in your retirement.
Different funds have different strategies, and some are higher risk than others; this can lead to a wide variance in performance, though some funds offer insurance against negative risk. Consolidating your super into the best performing fund whilst taking out risk insurance could prove a very profitable decision in the long run.
Retirement funds are a complex issue, and managing more than one account makes the process more complicated again; by consolidating, you can track your contributions and available funds at one source.
How do I consolidate?
Consolidating superannuation funds sounds complicated, and this is the reason that many australians shy away from doing this. This process has been considerably simplified however by the introduction of the myGov website https://my.gov.au/LoginServices/main/login?execution=e1s1.
There are a number of steps to take before rushing into this however.
Track down your funds
If you don’t know the details of all your funds, the Australian Taxation Office (ATO) can help you with this. If you don’t already have aamyGov account, create one; this site will list your super accounts. It is a useful exercise in any case as you may have forgotten about some funds.
Compare the funds
When considering consolidation, it is worth reviewing each of your superannuation funds. Once you know which funds you have, you will be able to compare them; the key areas of comparison are:
- ongoing fees payable
- performance to date
- benefits offered by the fund
- whether each fund can be consolidated
- exit fees payable
Check your intended fund
There are different types of superannuation funds, and employers can contribute to certain types; your current employer will need to be able to contribute towards your fund of choice. If they cannot do this, you will need to consider a second option.
When considering consolidating your superannuation fund, independent financial advice may consider scenarios that you had not thought of, and can be of enormous benefit.
Consolidating your superannuation funds is not a difficult task, and a myGov account will walk you through the process. It is worth noting however that to consolidate without doing some investigative work could prove to be a costly mistake.