Have lots of different super funds
Changing jobs every four or so years is not that unusual these days. For many
people this also means changing super funds as well - ceasing contributions to
your old fund and starting contributions to a new fund.
This means that many of us end up with numerous super funds - the average
number is between three and four, all with reasonably small balances. And it is
not surprising many people lose track of their "old" super funds.
Considering that it is likely that we will be expected to live on our
superannuation savings in retirement, we should closely monitor both the
adequacy of our super savings and the adequacy of the investment returns we
earn. Not to mention the minimum fees charged by the fund (noting that accounts
with very small balances are protected against fees).
The best way to do this is to consolidate all your super funds into the one
account. This can be done easily - usually by completing a simple form from
either your "new" or "old" fund. It is usually called something like a
"Transfer Authority".
The benefits of consolidating your super are you:
-
Can determine the balance of your super savings, simply and easily.
-
Can pursue a single and appropriate investment strategy. One super account does
not mean you are putting all your eggs in one basket if you select an account
that offers a range of investment options.
-
Can understand the total fees you are paying more easily.
-
Can select the super account that provides you with the most appropriate range
of investments and services for you.
Other things you need to think about when you consolidate your superannuation
are:
-
If you are able to direct your employment based contributions, let your
employer know the fund you have chosen to consolidate all your super to - and
that no further contributions are made to your old fund.
-
Make sure your previous fund(s) have not already transferred your benefits to
an Eligible Rollover fund.
-
Find out if any of your "old" funds charge an exit fee and ensure you are
comfortable paying these.
-
Check if you have insurance cover as part of your "old" fund and replace this
before closing this fund, as this insurance cover will cease when this fund
closed.
-
Find out how long any existing insurance cover continues for to ensure you have
continuous cover.
