Inspired by Benjamin Franklin, who said there were 'only two things certain in life: death and taxes', one might add superannuation guarantees and changing jobs. If you're an Australian worker, then it's more than likely you've got payments coming into a super fund.
Meanwhile, there's very few of us who stay at the same job for our entire lives. According to figures from Australia at Work, from 2009 to 2010 alone, around one-fifth of those employed had moved on to other opportunities.
What you're probably wondering is: When I do move on to that great new opportunity, what does it mean for my super?
What happens to my super when I change jobs?
A common misconception among people changing jobs is that a cheque will simply be made to cover what was in their superannuation. But this would defeat the purpose of Australia's super system, which is meant to keep funds invested and out of workers' hands until they reach the right age to access it.
Rather, you need to make personal arrangements to have your super carried over. Failing to do so is one of the prime causes of lost superannuation in Australia.
What are my options?
Your new employer should give you a standard choice form within 28 days of you starting your new job. At this point you have two choices:
- choose to have your new super guarantees paid into a new super fund, and leave the old one as is
- roll your previous super fund into a new fund, in which you will receive future contributions
- you can also keep your original fund and provide these details to the new employer
Once you've chosen, according to the Australian Taxation Office, your employer must arrange superannuation contributions to that fund within two months.
If you choose not to make a decision, your employer will simply make payments to the default fund. It may be advantageous to have your superannuation rolled over, however, into a brand new super fund. Some of these advantages include the fact that:
- it'll be easier than keeping track of numerous funds
- it'll be simpler to manage, and there'll be less paperwork involved
- fewer accounts means paying fewer fees
You might also elect to keep your super separate, if you get certain insurance advantages from it, for example.
What to consider if rolling your super over
Before you decide to roll your over, you should think about:
- whether your current super will actually let you roll over from other funds
- what it might mean for your tax burden
- whether there are fees involved, and how much
Whether you choose to do anything or not, the important thing is to make an informed decision.