Consolidating Super

Lost super? Like many of us you may have accumulated a number of superannuation accounts as you moved from one job to another. If you have moved house and not kept your superannuation fund informed of your current address then it is likely that they have nominated your account to the ATO’s Lost Member Register (LMR).

Why this is bad

If you have multiple accounts then there’s a good chance you are being charged multiple member fees. Consolidating all your funds into one account will fix this.

You may have insurance cover via several superannuation funds. This may lead to inappropriate levels of insurance above what you need. This could mean you are paying more insurance fees than you need to.

If you haven’t reviewed the asset allocation of all your funds and the individual investments within each fund then they may be inappropriate. The asset allocation of your funds is very important as over the long term the wrong asset allocation may lead to large opportunity losses. Likewise your investment selection needs to be reviewed on a regular basis as investment managers need to be reviewed also to make sure they are performing.

How to find your lost super

The Australian Tax Office (ATO) runs a website called SuperSeeker which allows you to search the Lost Member Register.

To search the database you will need your Tax File Number (TFN), Date of Birth and your name.

They will inform you of any results, if an account is found with less than $200 you may withdraw the funds by submitting a claim form.

To consolidate multiple superannuation funds you need to consider several points.

Generally you would want your funds amalgamated into your best super fund. This might be:

  • the cheapest,
  • the one with the best investment options,
  • the lowest cost insurance,
  • the one with the best insurance cover or options or
  • the one that has the best customer service department or online reporting.

WARNING: transfering superannuation funds can be financially disadvantageous and you should get professional advice before taking any action.

Consolidating Superannuation Traps

There are some traps you should be aware of particularly with regard to exit fees and insurance.

There may be exit fees payable on some of your funds. Many older style accounts may have exit fees.

Just because you currently have life insurance, TPD or temporary salary continuance (income protection) via your current fund, does not mean you will be able to get cover through your new fund. In many cases due to changes either in your health or the rules of the superannuation fund you may not be able to get the required cover you seek. If you can, it may be more expensive. You might consider applying for your intended cover before you cancel your previous cover. That way you can adjust your plans accordingly.

How to amalgamate your super funds

There are a number of ways to have your super funds consolidated. These are:

Do it yourself

To get your old super fund to send the proceeds to your new super fund you can send them a form requesting the transfer. Click here to get the form from the ATO.

Get your super fund to do it

The recipient super fund is the one you should ask to do this.

You can usually find a transfer form on the website of your preferred superannuation fund. For example:

Australian Super

You can also get a third party to do it typically Financial Planners. Due to the high level of red tape Financial Planners operate under, it will probably cost you a fair amount of money but they are required to review your situation, review all of the superannuation funds and make a recommendation. This will help prevent you unknowingly being hit up for exit fees or cancelling important insurance cover. They should also make appropriate recommendations on your asset allocation, appropriate investment options and levels of insurance cover.

You can find a Financial Planner here.

Disclaimer: Superannuation may appear simple but it can be extremely complex. Transferring superannuation funds can lead to financial losses or the loss of valuable insurance cover. It is highly recommended that you seek professional advice from a Financial Planner before taking any action.