Ask Paul: My old super fund won't take contributions from my new job


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Dear Paul,

I am currently in a super fund that cannot be "stapled" to me as is it a company fund.

Since leaving my last job, I have had to open another account to take contributions for my new job as my existing fund does not accept contributions from other companies.

ask paul clitheroe old super fund won't take contributions from other employers

With the new government super reforms, I started looking into having just one super fund. 

My old fund has an account balance discount where some fees are frozen when your balance reaches a certain amount.

Is this a feature worth considering when looking at consolidating into one super fund? - Michelle

That is interesting, Michelle. There are not a lot of internally run company super funds around these days.

First, I'd take a close look at your existing fund. I am curious as to whether it has any extra retirement benefits, such as defined benefit payments; equally it may have attractive insurance built into it.

But if it is a straightforward accumulation fund with typically priced insurance, the zero fee above a certain level is certainly a benefit, but you have two funds to keep an eye on.

So, it could well come down to performance. Look at that over, say, one, five and 10 years against your new fund. There are some older funds that are absolute dogs; on the other hand, it may be terrific.

You'll need your old fund to perform at about 1%pa better than your new fund.

If this is not the case and there are no "extras" in your old fund, such as free or cheap insurance or other benefits, you may want to consider rolling over your old fund to your new one.

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Paul Clitheroe AM is founder and editorial adviser of Money magazine. He is one of Australia's leading financial voices, responsible for bringing financial insight to Australians through personal finance books, the Money TV show, and this publication, which he established in 1999. Paul is the chair of the Australian Government Financial Literacy Board and is chairman of InvestSMART Financial Services. He is the chair of Financial Literacy at Macquarie University where he is also a Professor with the School of Business and Economics. Ask Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section. View our disclaimer.