How to change super funds?

If you want to change your super fund to a different provider, there’s a number of things you should consider before making a decision. Here’s a simple guide on what to look for when comparing funds and how to make the change.

Most people can choose where they would like their super contributions to be paid, from an employer’s compulsory superannuation guarantee payments to any additional voluntary contributions. But you don’t have to stick with that provider if you think you might be able to get a better deal elsewhere.

When comparing super funds, the Australian Government’s Moneysmart website says you should weigh up a fund’s performance and the fees you’ll pay, factors such as risk, investment returns and the quality of service.

There are a few other things you might like to consider before changing super fund. For example:

• Employer: Check with your employer to see if you’d lose out in any way by changing super fund.
• Insurance: Check how much and what type of insurance cover is provided by your current super fund, and what insurance you’d get with a different provider.
• Super fund: Check if you’re able to transfer your super to another provider. Some funds and accounts have rules that may prevent you from transferring your money.

Find out if you’re in an accumulation or defined benefits fund. Moneysmart says some funds can be generous so if you are in a defined benefit fund, you may like to get professional advice as once you leave, you may not be able to rejoin.

You should also consider any Product Disclosure Statement (PDS), Target Market Determination (TMD) or other relevant documents when considering any new super fund.

How to transfer super funds

If you can transfer your super, and decide you want to move to a new provider, then here’s what you need to do.

Step one: Choose a new super fund

When choosing a new super provider, you need to look at all the options to make sure it’s one that suits your needs.

Be careful to check things such as the fund’s performance over time, what fees it may charge and the level of service and support on offer to members. Remember too that past performance doesn’t guarantee future performance.

Read more: How to choose a super fund

Step two: Notify your employer

You need to tell your employer about your new fund to make sure its contributions go into your new account. The Australian Taxation Office (ATO) has a superannuation standard choice form that must be completed by both you and your employer.

Read more: How to let your employer know your super fund choice

Optional step three: Consolidate your super funds

If you have several super funds and would like to consolidate them into one, then you need to move your existing funds to your new super account.

There are three ways this can be done:

1. Use the myGov online portal. To do this, you’ll need to sign in to (or create) an account. Once signed in, if you’ve not already done so, link the ATO’s online service to your account via the “Link another service” option. Go to the ATO portal, then go to the “Check Super” menu. If your new account has registered with the ATO (this could take some time), a “Transfer super” menu option will appear. You should be able to use this to consolidate your super funds.
2. Ask your new super fund to consolidate the other funds for you.
3. Use the ATO’s rollover or transfer of super benefits services. There is an online option or you can download and print paper versions of the forms you need.

Read more: How to set up a myGov account

The pros and cons of changing super funds

Changing super funds may affect your financial future so you may want to weigh up the pros and cons very carefully before doing anything.

Association of Superannuation Funds of Australia (ASFA) CEO, Dr Martin Fahy, told Canstar that consolidating multiple super accounts can make sense for many people.

“However, some people choose to hold more than one super account to boost their insurance coverage or diversify their investments across funds,” Dr Fahy said.

“There’s no one-size-fits-all solution when it comes to super. ASFA recommends talking to your super fund about what’s right for your individual needs.”

You should also consider seeking some professional independent financial advice to help you make a decision.

The ATO says to look at the potential loss of any benefits from leaving your existing fund(s).

You can also check with the Australian Prudential Regulation Authority (APRA) to see if your existing super fund, or any of the ones you are considering, are listed as underperforming.

Past performance is an important consideration because it gives an indication of what a fund has been capable of delivering through varied market conditions. But investments can go up and down, so as we said earlier, past performance is not necessarily indicative of future performance.

Compare super funds

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