Having Multiple Super Accounts Is Decreasing Your Super

4 February 2015
According to a recent report by the Australian Taxation Office (ATO), Aussie workers are still wasting plenty of money on the fees attached to duplicate superannuation accounts, with an estimated 45% of workers having more than one super account.  Canstar asked industry funds giant AustralianSuper for some thoughts on why we end up with duplicate accounts and some things to consider when choosing a super fund.

Why Do We Have Multiple Super Accounts?

“The job market is much more fluid than it used to be, meaning people change employers more frequently,” said AustralianSuper spokesperson, Dean Felton.

“Unless they ask their new employer to pay their super into their existing fund, their money will automatically go into the employer’s default fund. So the employee ends up with a new super account each time they change jobs. That means they’re paying fees for each account, which eats into their total balance.”

For the vast majority of workers there is no need for this duplication, thanks to choice of fund legislation, which has been in existence for almost a decade. If you have more than one super account, it’s important to consolidate them so you pay only one set of fees.

“That’s easier than it sounds,” adds Mr Felton.  “Your super fund will help you, or you can visit the MyGov website, and do it yourself.”

How Does AustralianSuper Engage Its Members?

One challenge for all super funds is to actively engage with their members; those just starting out in the workforce as well as those who are closer to retirement. So how does AustralianSuper get its members engaged?

“Super is one of those things most people don’t think too much about until they get closer to retirement,” admits Mr Felton. “But at AustralianSuper we work hard to make sure our members know how to make the most of their super. Things like combining multiple super accounts into one to avoid unnecessary fees; and making additional voluntary contributions over and above what their employer puts in.  For example – a 25 year old worker who starts putting in just an extra $50 a month will end up with about $175,000 more in their super payout at retirement.

“We also keep in touch with our members by holding member briefings each year, through social media platforms like Twitter and Facebook, and via community events like the AustralianSuper Corporate Triathlon Series, and our sponsorship of the Young Achievers Career Kick Start Award.”

Features To Check When Joining A Fund

For those workers who don’t simply join the default employer fund when they start a new job – and hopefully that’s a proportion that will continue to increase over time – what are some of the features that should be on their ‘super fund shopping list’?  According to AustralianSuper, investment performance over time should be an important factor.

“People should shop around to make sure they’re investing their money wisely. They should certainly look for a fund with low fees, but the most important aspect of any super fund is its investment performance over time,” said Mr Felton.

“As well, people should consider the level of life, disability and income protection insurance their fund offers, whether that’s appropriate for them, or whether they need more.  And of course, many people enjoy the security of knowing their money is invested with a very large fund like AustralianSuper, which has two million members and manages more than $80 billion of members’ money.”

Put looking after your retirement nest egg on your “to do” list this year – preferably this month. Check out Canstar’s Superannuation Star Ratings report here and, if you are one of the 45% with more than one account, read more about how to find your lost super here.

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