Keeping one super account

Why the number of accounts matters

The ATO says having more than one super account could mean paying multiple fees and charges, which may reduce retirement savings. Putting all your super in one account means paying one set of account fees and charges, and the ATO adds that differences in fees can make a big difference to what you have when you retire.

Insurance counts too. Each account may charge fees and include insurance, which can reduce a super balance, and several accounts can mean paying for several insurance policies. Moneysmart calls combining your balances into one account consolidating. The government brought in stapling, which keeps one account following you from job to job, to reduce the number of accounts people hold; MySuper and choosing a fund explains how it works when you start a new job.

Rules unchanged by a rollover

• The preservation rules. They still apply to benefits rolled over to another complying fund, so the money can be reached only once you meet a condition of release.
• Where your employer pays. Transferring your funds does not change the fund your employer pays contributions to. The ATO suggests speaking with your employer about whether you can choose a different fund, and giving them the new account details for future contributions.

Some rollovers happen without a request at all, for example when two super funds merge.

The checks before a transfer

What the ATO and Moneysmart say to look at before super moves between funds

Check	What the source says
Insurance	The fund being left may hold cover for you against death, illness or an accident that stops you returning to work, and that cover may be lost on leaving; the ATO says to check whether the other fund offers comparable cover. Moneysmart notes that when you change funds, your existing cover usually continues until the new fund has issued the replacement policy and confirmed the new cover.
Fees	The fund you leave could charge administration fees and exit or withdrawal fees, and the fund you move to may charge entry or deposit fees.
Whether the new fund accepts it	The receiving fund may not accept transfers from other funds or ATO-held super, so the ATO says to check before starting.
The kind of account	Moneysmart says to check whether an account is accumulation or defined benefit, and to get professional advice before rolling money out of a defined benefit account. Some defined benefit accounts provide very generous benefits, and once you leave, you can’t rejoin.
Your employer	Changing funds may affect how much your employer contributes, since some employers contribute more to certain funds. When you choose an account, Moneysmart says to tell your employer where to pay your super, giving the fund name, unique superannuation identifier (USI) and your member number, plus anything else they ask for.
A deduction for personal contributions	Where you intend to claim a deduction for personal contributions you made to the account being transferred, the ATO lists three steps to finish before you request the transfer: confirm you are eligible, give your fund a valid notice of intent to claim, and receive your fund’s acknowledgment that it has received and actioned that notice. If those steps are not finished before the money leaves the fund that received the contributions, a deduction for them cannot be claimed.
Which account to keep	Moneysmart cautions against simply moving everything into the account with the highest balance: the one that suits you may be one of the small accounts, or an account with a new fund.

How a transfer is made

1. The account that stays, and the ones that roll into it

   Moneysmart describes consolidating as choosing the account to keep, then rolling the other balances into it. You can check how many accounts you have, and combine them, free through the ATO at myGov.

2. A whole balance or part of one

   A whole account balance can be transferred to another fund only through ATO online services or the paper form, because the process closes the account. To transfer part of a balance, you contact the fund the money is leaving. Without myGov, the ATO’s rollover form can be used to request a rollover between funds.

3. The wait

   Funds generally take 3 days to make the transfer to the nominated fund.

When a transfer may not go ahead

A transfer may not be possible if the benefit was already rolled out, or if a transfer request was made within 12 months of the current one. A fund may also decline a request that doesn’t meet its rules, and in that case it is required to tell you so in writing.

Pressure to move your super

Moneysmart reports that some people have lost their retirement savings after pressure to switch funds, set up an SMSF or put money into unsuitable products. On its consolidation page it warns about phone calls, clickbait advertising and promises of unrealistic returns used to draw super into risky investments, and it says to stop, think carefully and check the claims first.