How to change super funds?

How to transfer super funds

If you’ve decided you want to move to a new provider, then here’s what you’ll 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.

When comparing options, it can pay to consider a fund’s performance over time, what fees it may charge, and the level of service and support on offer to members. Remember that past performance doesn’t guarantee future performance.

Step two: Notify your employer

You’ll 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.

Optional step three: Consolidate your super funds

If you have several super funds and would like to consolidate them into one to save on fees, then you’ll need to move your existing savings to your new super account.

There are three ways this can be done:

1. Use the myGov online portal. Once you’ve created an account and/or signed in, 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, which you can use to consolidate your super funds.
2. Ask your new super fund to consolidate the other funds for you.
3. Fill out the ATO’s rollover or transfer of super benefits form. There is an online option or you can download and print paper versions of the forms you need.

Can I switch super funds?

In Australia, moving super funds is typically a fairly straightforward process, unless you belong to a defined benefit fund, or you hit certain eligibility hurdles laid out by the ATO.

Most people can choose where they would like their super contributions to be paid, including an employer’s compulsory superannuation guarantee payments as well as any additional voluntary contributions.

Defined benefit funds, however, offer greater benefits the longer you stay with them. Switching super funds could potentially mean missing out on generous offers, and once you leave, you may not be able to re-join, so it may be worth carefully considering if it’s worth switching.

Likewise, according to the ATO, you may not be eligible to choose a super fund for your super guarantee contributions if:

• your super is paid under a state award or registered agreement
• your super is paid under certain workplace agreements made before 1 January 2021 that require super contributions, including some Australian workplace agreements
• you’re a federal or state public sector employee
• you’re in a particular type of defined benefit fund or have already reached a certain level of benefit in that super fund.

Is it a good idea to change 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)’s former CEO, Dr Martin Fahy, told Canstar that consolidating multiple super accounts can make sense for many people.

“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.”

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 indicates what a fund has been capable of delivering through varied market conditions. But investments can go up and down, so past performance is not necessarily indicative of future performance.

Before switching super funds, you may want to consider seeking some professional independent financial advice to help you make a decision.

How can you compare super funds?

If you are thinking it’s time to change super funds, a good place to start could be comparing super funds with Canstar. Be sure to weigh up a fund’s performance and the fees you’ll pay, as well as factors such as risk, investment returns and the quality of service.

Before changing super fund, you may also want to first check with your:

• 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.

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