Combining your superannuation accounts is important for many reasons.
This article addresses the importance of combining your superannuation accounts and how to combine your super or transfer super from one account to another.
Combining superannuation is also commonly referred to as consolidating your superannuation accounts.
Combining your superannuation accounts can feel like an overwhelming task, particularly if you have accumulated several super accounts over the years through various employers.
While it may seem all too hard, there are some simple steps that you can take to ease the burden.
Importance of Combining Your Superannuation Accounts
There are a number of reasons why it is in your best interest to combine your superannuation accounts.
Superannuation Account Fees
Combining your superannuation accounts will reduce fees. Most superannuation accounts charge a percentage based administration and investment fee, so regardless of how many accounts you have, these fees would be similar, as the balance on which the percentage is being charged is the same whether you have two accounts or six.
However, many accounts also charge some type of member fee, which is a flat dollar fee. And having more accounts means you pay more of these.
Also, some super accounts will charge a tiered percentage based fee, where a lower percentage based fee will be charged as your account base increases. So combining your superannuation accounts will allow you to benefit from the tiered fee structure, rather than having multiple accounts incurring fees at the bottom tier.
Management of Superannuation Account
By combining your superannuation accounts, it will be much easier for you to manage and keep track of. Having only one super account will ensure you are only receiving superannuation statements in the mail from one super fund and you will only need to login to one website to see your superannuation balance.
Having only one superannuation account also allows you to keep on top of any fees being charged, investment options available and superannuation death benefit nominations in place.
By combining and consolidating your superannuation accounts, you can have a more focused investment strategy, allowing you to better manage your savings and project your end retirement benefit.
Having all of your superannuation invested in one account, at a level of risk you are comfortable with, is integral to helping you achieve your long-term retirement objectives.
What If You Die?
Apart from the family home, superannuation is generally the largest asset that a person will own. Combining your superannuation accounts will make things easy for your beneficiaries and loved ones to receive your super as an inheritance if you were to pass away. Having several super account may result in some lost super never being found.
How To Combine Your Superannuation Accounts
In order to consolidate and combine your superannuation accounts, you should first find all of your superannuation accounts and the balances of each.
If you think you may have lost some of your super, you can follow these steps.
It is possible your super has been rolled over to an Australian Eligible Rollover Fund (AERF). This occurs when your previous superannuation provider is unable to locate you for a period of time and is required, by law, to transfer your super to an AERF, which is set up specifically to take care of your savings and reunite you with your super.
Once you have collated your superannuation accounts, you should decide which super account is most suitable for you.
Generally, if you are a low-touch kind of person who wants to know where their super is, but doesn’t want to be actively involved in the investment decisions on a regular basis, then a low-cost industry fund is often a good option.
If you want a range of investment options and are a bit more hands-on, then a retail super account might be more appropriate.
If you want to take a very active role in your retirement and intend on purchasing assets with your super that are not ordinarily available in other super funds, such as direct commercial property, then a self managed superannuation fund (SMSF) may suit you. Just be aware that many important responsibilities are associated with a SMSF and you should have a balance adequate enough to justify the costs of maintaining a SMSF.
After you’ve chosen the account you wish to consolidate your superannuation savings into, contact the provider. Click here for a list of many superannuation providers in Australia.
The reason I say to contact the super account you wish to transfer your savings into is because they will do whatever they can to help you.
They want you to be a member of their fund.
They want you to hold your super with them.
Therefore, they will likely help tremendously with the process of combining your superannuation.
I also find this as a great way of determining the service I can expect from a super fund in the future.
For example, if they aren’t very helpful in helping you combine and transfer your superannuation, then they usually won’t provide you with a good ongoing service either.
You should try to avoid contacting a superannuation fund that you wish to transfer your super out of, if possible.
They will often not be overly helpful and will delay the transfer of your super savings for as long as possible, because they are losing a member and the way they charge fees is generally based on a percentage of your balance, so there may be a delay in the transfer of your super.
I’m not saying this will happen every time or that super funds are deceitful, but if they can find the smallest error in your application for withdrawal, they might just use it to prolong the process.
If the super account that you are wanting to transfer to is unable to help you and you need to contact the super fund where you intend to transfer your savings out of, then give them a call and ask them which form to use.
A little trick I use is to ask for the name of the person that helped you at the end of the conversation. This automatically makes them accountable for everything they have just told you.
Once you have asked for their name, pause for a few seconds after they have told you. This gives them the opportunity to correct anything they have said.
They should direct you on the website to a ‘forms and documents’ page (or something similar) and a withdrawal/rollover form for you to roll your super out to another fund. You should also ask of any exit or withdrawal fess that you may incur.
Hopefully this helps with understanding how you can transfer super from one account to another and how to combine your superannuation accounts. Read some examples of how superannuation works, here.