Most people will go through several different jobs in the course of a lifetime. Whether you’ve only had a few long-term employers, or you’ve changed jobs as frequently as you’ve changed shirts, you may well have money spread out across a number of different superannuation funds.
If this is the case, you might think about consolidating your superannuation.
Why consolidate super funds?
There are several reasons why you might roll your superannuation all into one. Firstly, having to juggle several different accounts means you might easily lose track of them. At the time of writing, unclaimed or lost superannuation funds totalled $18.9 billion — or an average of $3100 per person. If you want to avoid this fate, super consolidation could be a good move.
In addition to this, you’ll also save money by paying fewer fees, and reduce the hassle involved in managing your super. Rather than having several sets of paperwork and updates to keep track of, not to mention decisions around how those funds are invested, you can reduce that number to one, saving yourself time and stress.
What to consider before consolidating
Prior to making any sweeping decisions about your super funds, get informed. Some funds may charge exit fees — you will need to find out which ones and how much they are. Secondly, you will need to check if you will lose any insurance cover and, if so, whether your new fund offers similar, adequate benefits.
In addition to this, consider the tax or investment implications of consolidation. If you’re getting taxed at a higher rate, avoiding the added fees of multiple funds may not be worth it.
Lastly, you’ll want to make sure your employer will be able to keep making superannuation contributions to whatever new account you’ve chosen.
How do I do it?
First of all, you need to choose the super fund that will be most advantageous for you. If it’s a new one, you’ll need to open an account and obtain its details to give to your employer.
Next comes the paperwork. You can download a NAT 71223 form, or rollover initiation request, from the Australian Taxation Office (ATO) website, print it off and fill it out. Keep in mind that there are different forms for whether you’re transferring your super into a self-managed super fund or not, and that you’ll have to fill out a separate form for each of your different funds.
Then check that the rollover benefits statement you receive from the old funds once the consolidation is finished is correct, and store it in a safe place.
Before you know it, your super will be sitting safely all in one place.