Chances are, like many Australians, you could have more than one super fund. The thing is, most of us stick to one personal savings account to save on fees and keep better track of our spare cash. Yet, doubling up on super funds means wasting money on unnecessary fees and insurance premiums – money that is yours for the future. That makes it worth giving your superannuation savings as much attention as your day to day savings account.
Keeping track of super
On a practical level, having more than one fund means dealing with multiple sets of super statements, as well as making it harder to have a say in how your super is invested. The big risk however is that you'll lose track of your various super accounts over the course of a working life. Already there’s a vast pool of $14 billion in lost and unclaimed super waiting to be reunited with the rightful owners1.
What many workers don't realise is that having more than one super fund can eat into the value of their nest egg.
Money wasted on unnecessary fees
Each fund charges its own set of annual fees – money that's paid directly from your super savings. So having multiple funds means paying several sets of fees.
It pays to check your own situation. The Australian Tax Office recently warned “Australians with multiple superannuation accounts could be paying thousands in unnecessary fees every year.”
Are you in this boat? The Government's myGov.com.au portal makes it easy to check how many accounts you have and where they are all located. Simply set up a link to your Australian Tax Office account and go the ‘Super' tab. Here you'll find a list of all of your accounts, as well as your current balances.
But it's not just about fees.
Life insurance is an automatic feature of many super funds, and if you have more than one fund, it's likely you're also paying several sets of life cover premiums. It's a cost that can steadily eat away at your super savings.
One account may mean more in super
The easy way to keep track of your super and avoid losing money to unnecessary fees and life cover premiums is to hold all your super in a single account. It's easy enough if you're just starting out in the workforce. Simply take your super account with you when you change jobs and let your new employer know the details of the account you'd like super contributions paid into.
If you already have more than one super fund, it may make good financial sense to rollover (or consolidate) your various super balances into a single account.
What to weigh up
Before consolidating your super into a single account, it's worth taking a moment to check the features and benefits offered by your other funds. Be sure you won't miss out on any valuable perks.
Also, give careful thought to the level of insurance cover held with your other fund/s. In particular, be wary of switching funds if you have an existing medical condition – you could get knocked back on insurance for any conditions you currently have.
Finally, confirm that your employer can contribute to your chosen fund. If your job is governed by say, a workplace agreement, it may specify the fund or funds into which payments must be made by your employer.