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How to consolidate or transfer your super

How to consolidate
or transfer your super

Why you should consider consolidating your super

Luckily, Australians have superannuation to financially prepare for life after work. It’s often not front of mind because it’s not tangible but planning your super early can make a substantial difference in retirement.

Australians have billions of dollars in lost super. A name change, moving house, a new job, going overseas, and forgetting to update your details can all result in lost super. Technically, this super isn't lost, as it is usually held for you by the ATO and you simply have to claim it. You can check for lost or unclaimed super through the ATO's online services, through myGov.

If you have more than one super account, you are likely paying more in fees than you need to. Consolidation can protect your balance from erosion through unnecessary fees and charges. It also makes things easier to manage and saves you time. With just one super account, you will pay just the one set of fees, have less documentation to deal with, and be able to keep track of your balance easily.

Choosing the best fund for you

Avoid simply transferring your super into the account with the highest balance or the one which your employer is paying into. Not all super funds are the same, and some funds record higher returns and offer lower fees than others. In addition, each super fund will have different investment options and features like insurance. These factors mean it’s important to take time to consider the best fund for your goals and requirements.

Start by checking the prospective fund's performance over the past five to 10 years. Compare fees, different investment options (such as conservative, balanced, and growth), insurance options, and other features and services available. Finally, understanding how your super savings grow through different approaches to diversification can help you make a smarter choice about the best fund for you. If you would like to know more about portfolio diversification strategies check out our age specific guides. If you are early in your career, download this guide. If you’re closer to leaving the workforce and planning to retire download this guide.

The ideal fund for you could be a fund with which you currently have a small balance or it might be a completely new fund. Doing the research before you decide could help you attain higher returns, lower fees, and the features you are looking for with your super. Lastly, verify your employer can pay your super into your chosen fund.

Benefits and risks associated with moving your super

If you currently have only one super account with the one fund, you might be considering making a shift for a number of reasons. Your existing fund might be performing poorly, or you might be leaving a corporate fund after changing jobs. You might be looking for a fund with better features or a fund that aligns with your personal values, profession, or trade. This could impact the type of fund you decide to move to. For example, types of funds include corporate, retail, public sector, and industry super funds. Industry super funds are run for their members and there are some that don't pay commissions or incentives to their staff, such as EISS Super.

Moving your super could yield benefits such as stable returns, personalised service, and lower fees. On the other hand, transitioning to another super fund could come with certain risks. You could lose access to the type of insurance cover you need. If you are moving funds for better returns it’s also important to understand that last year’s winner often isn’t next year’s, so you could end up with a fund that did well last year but ends up performing poorly in the coming year. However, this potential risk could be managed by choosing a fund that has consistently performed well over the longer term - the past five or 10 years, for example. Remember, switching to the right fund can make a significant difference - tens of thousands of dollars or more - to how much you have to live on in retirement.

Note there could be certain tax implications with moving your super:

  • Rollover – If it’s a super rollover from one fund to another fund, then you don't need to pay tax.
  • Paid to you first – If you’re able to have your super benefit paid to you before you move it into your super account, then the payment has gone outside the super system and you might need to pay tax.

Things to consider before moving your super

You might have decided to consolidate multiple accounts into one of your existing funds or to move all your super to an entirely new fund. Before you do so, you will want to check a few things to ensure a smooth process. It could help you avoid having to compromise on features like insurance.

Check whether you currently have super in a defined benefit fund. If you are switching from a defined benefit fund to an accumulation fund, you should obtain professional advice beforehand, as it can have a significant negative impact on the value of your benefit. Ask the advisor to check whether you will end up losing out on valuable benefits in retirement if you do or ask your fund directly.

Verify employer contributions

It’s worth verifying your employer contributions to confirm whether switching will affect how much employer contributions you will receive. This is because some employers make more contributions to specified funds.

Check insurance cover

Do you have insurance cover with one of your current funds? Switching away or consolidating into another fund will end the cover and you might not be able to get the same type of cover with another fund. This can be especially critical to double check if you have a medical condition, are older or work in a high risk occupation. Whether it's life, total andf permanent disability, and/or income protection insurance, make sure you still have the cover you need. It’s a good idea to arrange for alternative insurance before moving out your super and closing the account. That way, you won't have any gap periods in cover.

Tell your employer

Let your employer know the fund you have chosen so they can pay your super into your preferred fund. Your employer can provide you with a form for nominating your new, preferred super fund. Complete this and return it to your employer.

Steps to consolidate your super

Evaluate your circumstances

Start by taking stock of your current super so you have a clear idea of what you need to do. Do you have multiple inactive or low-balance accounts and want to consolidate or rollover? Or do you have a single account but want to transfer to another fund? Keep in mind if you have any inactive low-balance super accounts, they will be reported and paid to the ATO automatically, as required by law.

Consolidation process

Review prospective super funds and choose one that matches your needs in terms of longer-term returns, fees and charges, and product features. Take time to read the product disclosure statement (referred to as a PDS) so you have all the facts. Check with your old fund(s) and new chosen fund about any extra charges you could be paying, though bear in mind exit fees are now prohibited.

It's completely free to transfer your super, and you can do it in a few easy steps online.

  • Through myGov – If you have a myGov account and the Australian Taxation Office linked through your account, you can go straight to the ATO portal through myGov to consolidate your super. If you don't have a myGov account, you can create one by going to my.gov.au. Link your myGov account to the ATO. Click through to the ATO portal, and in your dashboard you will see an option for your super. Click on it and select 'Manage'. If you have more than one super account, you will see 'Transfer super'. Select this option and choose the fund you would like to consolidate all your super into.
  • Online form – You can also use the Rollover initiation request to transfer whole balance of superannuation benefits between funds (NAT 71223). Follow the ATO's instructions to complete the form, which the ATO will send electronically to the relevant super funds.
  • Paper form – Alternatively, you can lodge a paper form with the ATO to start the same process. You also have the option of contacting your providers directly to make the changes, but using the ATO's online services could be easier as it saves you from having to provide identity documents to each provider.
  • New fund – If you are moving to a completely new fund, contact your chosen fund directly and complete an ATO rollover form. You also have the option to fill in a rollover form with your new fund, and your new fund will do the rest for you. Your old fund will transfer your balance over to the new fund before closing your old account.

Keeping track of your super

Once you have switched to your preferred fund or consolidated multiple super balances, take a proactive approach to tracking and managing your super. Stay aware of how much super you are getting from your employer and review your super balance at least once a year. Check you are still happy with the investment strategy, along with any insurance you are getting through super.

Having all your eggs in the same basket is actually the best way to go when it comes to multiple super accounts. Finding a fund that meets your requirements and consolidating or rolling over any additional accounts will see you saving on fees and charges.

At EISS Super, we offer low fees and stable long-term returns. We are always happy to help you see your future more clearly and are open to all Australians looking for a fund managed by genuine people protecting your super.

Make the switch today
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