Changing jobs and superannuation: what you need to know
12 Nov 2021
When you change jobs, your new employer must ask if you want to join its nominated super fund, or if you have a preferred super fund of your own.
If you don’t choose a super fund, then the Australian Taxation Office (ATO) says that under rule changes introduced in November 2021, your new employer must take an extra step to see if you already have an existing super fund.
Your employer must ask the ATO to provide details on what is known as your stapled super fund.
This is an existing super account linked, or “stapled”, to you so it follows you as you change jobs. The aim is to prevent you having multiple accounts, which could cost you in fees.
The ATO says an employer who doesn’t meet the new obligations for super may face penalties.
What is your stapled super fund?
Your stapled super fund will be selected by the ATO based on information it holds about your super fund membership, as reported to it by any super funds you’re a member of.
If you have an existing super account then the ATO will tell your employer this is your stapled super fund account for contributions.
If you live and work in Australia your employer usually has to pay the minimum Superannuation Guarantee (SG) into this fund if you’re at least 18 years old and earn $450 or more (before tax) in salary or wages (including overtime) in a calendar month. That $450 rule is due to be scrapped from 1 July, 2022. If you’re under 18, you must also work at least 30 hours a week to be entitled to the SG.
If you have more than one super account then the ATO says it will apply “tiebreaker” rules to determine which fund to nominate as your stapled fund.
To do this it will consider things such as whether it’s previously identified one of your accounts as a stapled super fund, when any contributions were last made to the accounts, how recently the accounts were created and how much money there is in each of them.
The ATO told Canstar you can’t choose which of your multiple accounts is your stapled super fund. So if you’re concerned about how any tiebreaker rule may be applied then it suggests you fill out the super standard choice form to tell your new employer which is your preferred super account.
Should you change your super fund?
When you change jobs you may consider changing your super fund at the same time. Your new employer will have nominated a super fund for you to consider, but it’s your choice which fund you want your employer to pay the mandatory super guarantee contributions into, along with any optional extra contributions they or you may wish to make.
It’s important you consider whether your current super fund is right for you, or if another fund may be more suited to your needs. If you have multiple super accounts, you may also want to consider consolidating them into one to reduce the amount of fees you may be paying.
Before doing anything though make sure you take the time to read any product disclosure statement (PDS) and target market determination (TMD) documents for each fund you are considering. It might be wise to seek some independent financial advice as well.
You should compare super funds on factors such as their fees, long-term performance and any insurance options on offer.
It’s also important to consider the benefits attached to your current super fund(s) and any other fund you are considering. For example, your new employer may give you access to a corporate super plan that may have lower fees or a more competitive insurance offering.
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How many people change jobs?
About 975,000 people employed in Australia changed jobs in the 12 months to February 2021, according to job mobility figures from the Australian Bureau of Statistics. That’s about 7.5% of the workforce and was the lowest job mobility rate on record, which dates back to at least 1972.
Professionals accounted for the largest share of those changing jobs, at 20.8%, down from 21.7% the previous year. Machinery operators and drivers had the smallest share at 6.0%, down from 6.5% the previous year.
Changed jobs by occupation
While the idea of a single job for life may be a thing of the past, the ABS figures show some people stay employed in their current job for several years.
Of the 13 million people employed in February 2021, about 46% had been in their current job for five years or more, up from 44.3% the year before. Of these, about one in four had been employed for 20 years or more.
Compare Superannuation with Canstar
The table below displays some of the superannuation funds currently available on Canstar’s database for Australians aged 30 to 39 with a super balance of up to $55,000. The results shown are sorted by Star Rating (highest to lowest) and then by 5 year return (highest to lowest). Performance figures shown reflect net investment performance, i.e. net of investment tax, investment management fees and the applicable administration fees based on an account balance of $50,000. To learn more about performance information, click here. Consider the Target Market Determination (TMD) before making a purchase decision. Contact the product issuer directly for a copy of the TMD. Use Canstar’s superannuation comparison selector to view a wider range of super funds. Canstar may earn a fee for referrals.
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This article was reviewed by our Sub Editor Tom Letts before it was updated, as part of our fact-checking process.
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