How to Combine Super and What to Check Beforehand

Superannuation, or “super,” is a long-term savings mechanism designed to provide income during retirement. Employers typically contribute a percentage of an employee’s salary into a superannuation fund, which invests and manages these funds until retirement age. This system aims to provide financial security, complementing government pensions. Over a working lifetime, individuals often accumulate multiple super accounts due to changing jobs.

Understanding Why You Might Combine Super

Individuals often combine superannuation accounts for several reasons. Multiple accounts can make managing retirement savings complex. Consolidating simplifies tracking contributions, monitoring investment performance, and reviewing overall balances. This streamlined approach reduces administrative burden and provides a clearer financial overview.

A significant motivation for combining super accounts is to reduce fees. Each superannuation account typically incurs its own administration and investment management fees. Paying these charges across multiple funds can erode retirement savings. Consolidating into a single account means paying only one set of fees, potentially saving hundreds or thousands annually, boosting the final retirement balance.

Combining accounts also allows for a more cohesive and optimized investment strategy. When super is spread across several funds, it is difficult to maintain a unified investment approach aligned with personal risk tolerance and financial goals. Consolidating enables a single, comprehensive investment strategy for the entire super balance, ensuring funds are managed to best suit an individual’s long-term objectives. This focused management can lead to better overall returns.

Locating Your Super Accounts

Before consolidating, identify and gather details for all existing superannuation accounts. A primary method for locating accounts, including lost super, involves using the government’s online services. By linking your Tax File Number (TFN) to your MyGov account, you can access Australian Taxation Office (ATO) online services, which display all super accounts associated with your TFN. This service provides details like fund name, account number, and current balance, even for forgotten accounts.

Reaching out to past employers can help identify old super accounts. Employers often provide details of the funds they contributed to. Reviewing old superannuation statements or annual reports can also reveal account information. These documents typically contain the fund’s name, your member number, and the Unique Superannuation Identifier (USI) or Australian Business Number (ABN).

Key information to gather for each account includes the super fund’s name, its ABN or USI, your member number, and the current balance. Having these details streamlines the consolidation process.

The Process for Combining Super

Once all existing superannuation accounts are identified, the combining process can begin. The simplest method is using online services provided by the Australian Taxation Office (ATO) through MyGov. After logging into your MyGov account and navigating to the ATO linked service, select the “Super” section, then “Manage,” and “Transfer super.” This tool allows you to view identified super accounts and select which to transfer into your chosen primary fund.

Using the MyGov service, you can transfer the entire balance from one super account to another. The system guides you through selecting accounts for transfer and consolidation. This digital process is straightforward and typically closes old accounts once the transfer is complete.

Alternatively, initiate consolidation directly with the super fund you wish to keep. Most super funds have a “rollover initiation request” form, available on their website or by contacting them. By completing this form with details of your old super accounts, your chosen fund will typically handle the transfer request from previous funds. After submission, expect confirmation notices from both funds, with the rollover typically taking a few business days to process.

Important Considerations Before Consolidating

Before consolidating your super, evaluate factors to choose the most suitable fund. Compare the fee structures of all your accounts, as fees significantly impact long-term returns. Look for administration, investment management, and any exit or transfer fees. Funds may charge a fixed fee, a percentage of your balance, or a combination. Lower overall fees can mean a larger balance at retirement, so a thorough comparison is important.

Insurance coverage within your super accounts is another consideration. Many super funds automatically provide life insurance (death cover), total and permanent disability (TPD) insurance, and income protection. Consolidating accounts may cancel insurance policies in transferring funds, potentially leading to lost coverage that is difficult or expensive to replace, especially if your health has changed. Compare cover levels, terms, and costs across all funds and consider applying for new insurance in your chosen fund before closing old accounts.

Evaluate the investment performance and options offered by each fund. Review historical performance over various periods, such as five or ten years, to understand consistent performance. Consider the range of investment options, from conservative to growth-oriented, and assess if they align with your risk tolerance and financial objectives. A fund with a strong track record and diverse investment choices can be more beneficial long-term.

While most rollovers between super funds are generally tax-free, be aware of specific circumstances that could have tax implications. This might include certain defined benefit funds or old untaxed elements within your super. If you made personal contributions and intend to claim a tax deduction, ensure this is processed with the old fund before consolidation. For complex situations or significant balances, seeking professional financial advice is advisable to understand all potential tax consequences.